Issuu on Google+

2011 Annual Report


Anantara Kihavah Villas, Maldives

Desert Islands Resort & Spa, Abu Dhabi

Anantara Rasananda, Phangan

Oaks Boathouse, Australia

Anantara Dhigu Resort & Spa, Maldives

Oaks Club Resort, New Zealand

Anantara Phuket Resort & Spa

JW Marriott, Phuket

Four Seasons, Koh Samui


Middle East

New Zealand

Australia

vietnam

bali

middle east

maldives

Thailand

Hospitality and Resorts Anantara Resort & Spa - Thailand

Our award winning Anantara brand has 9 properties located throughout Thailand. In 2011, we opened two new properties and achieved a 53% increase in total system sales. Thailand is one of Asia’s leading tourist destinations and the Anantara enjoys a strong position with properties extending from beaches of Phuket and Samui to Bangkok and north to the Golden Triangle. Anantara Resort & Spa - Maldives

In the Maldives, we increased our footprint in that exciting market to four resorts with the launch of the Anantara Kihavah which has stunning 78 pool villas. In its first year of operation the Anantara Kihavah achieved sales of US$ 18 million. In 2011, the resorts in the Maldives combined to total sales of US$ 57 million. Anantara Resort & Spa - Middle East

In the middle east, our two Anantara resorts combined to achieve a 21% increase in sales. Anantara Resort & Spa - Bali

In Bali, the 60 room Anantara Seminyak achieved a 8% increase in sales. Anantara Resort & Spa - Vietnam

We have one Anantara in Vietnam and are looking to develop more in that expanding market. Oaks Hotels & Resorts - Australia

In 2Q11, we acquired 100% of Oaks which has 38 properties, most of which are located in Australia.

Direct-Owned

Year

Sales Baht Million

2011 2010 2009

Year

1,516 994 790

Sales USD Million

2011

51.5

2010

29.5

2009

27.6

(Total sales of the resorts in the Maldives consist of sales of 3 Anantara resorts and Naladhu)

Year

Sales AED Million

2011

82

2010

68

2009

29

Year

Sales IRP Million

2011

65

2010

60

2009

48

Year

Sales USD Million

2011

2.4

2010

-

2009

-

Year

Sales AUD Million

2011

79

2010

-

2009

-

Oaks Hotels & Resorts New Zealand

Year

We are pleased that the Oaks acquisition gave our hospitality business exposure to another market; New Zealand.

2011

2.7

2010

-

2009

-

Oaks Hotels & Resorts Middle East

Year

With success already in the Middle East, Oaks is starting to move well beyond it core Australian market.

2011

2.6

2010

-

2009

-

Sales AUD Million

Sales AUD Million

Managed/Franchise


Direct-Owned St.Regis

At one of Bangkok’s most prestigous locations, we opened the St. Regis in early 2011. In its first year of partial operation, the St. Regis achieved sales of Baht 212 million. At the St. Regis, we also succeeded in selling 55% of our residential inventory and this contributed significantly to overall profit in 2011.

Four Seasons

Our award winning Four Seasons hotels in Bangkok, Chiang Mai, Samui and Chiang Rai combined to achieve revenues of Baht 1,767 million. Our Four Seasons Tented camp in Chiang Rai has been recognized by the readers of Conde Nast as the #1 resort in the world.

Marriott

Our Marriott and JW Marriott resorts including three that are located in Hua Hin, Pattaya and Phuket combined for revenues of Baht 2,178 million. Rebranded Bangkok Marriott Resort and Spa, to be Anantara Bangkok Riverside Resort and Spa in November 2011

Elewana Africa

Our safari camps operating in Tanzania combined for US$ 11.9 million in sales. It was a 40% increase over 2010. Minor International Brands

Minor International branded resorts including Naladhu in the Maldives, Harbor View in Vietnam and Kani Lanka in Sri Lanka combined for sales of US$ 11.4 million in 2011. Royal Garden Plaza

Our three shopping centers that are located next to our hotels in Phuket, Pattaya and Bangkok had revenues of Baht 700 million. MSPA International

With more than 30 spas in 10 countries, our spa business combined for Baht 480 million in sales last year.

Year

Sales Baht Million

2011

212

2010

-

2009

-

Year

Sales Baht Million

2011

1,767

2010

1,541

2009

1,622

Year

Sales Baht Million

2011

2,178*

2010

2,142

2009

2,149

* Sales include revenue from Anantara Bangkok Riverside Resort and Spa for comparison purpose.

Year

Sales USD Million

2011

11.9

2010

8.5

2009

5.9

Year

Sales USD Million

2011

11.4

2010

8.1

2009

6.7

Year

Sales Baht Million

2011

700

2010

623

2009

616

Year

Sales Baht Million

2011

480

2010

487

2009

431

Managed/Franchise


Restaurants

Direct-Owned

The Pizza Company

Our 189 company owned and 88 franchised outlets saw system wide sales increase by 15% to Baht 5,110 million. Swensen’s

With 118 company owned and 149 franchised outlets, Swensen’s posted a 11% increase in system wide sales to Baht 2,848 million. Thai Express

Thai Express and related brands such as New York New York and Xin Wang Hong Kong Café had sales of SGD 105 million. The Coffee Club

Coffee Club, which is 95% franchised, posted system wide sales that were up 14% to A$ 334 million. Sizzler

45 Sizzler outlets in Thailand and China combined for sales that were up 15% to Baht 2,247 million. Dairy Queen

237 company owned and 26 franchised Dairy Queen outlets in Thailand achieved sales of Baht 1,202 million. Burger King

27 company owned Burger King outlets combined for sales of Baht 953 million. Select Service Partner Limited

Our restaurant business in airports experienced a 8% increase in revenue. Minor Dairy Limited

Sales from our ice cream factory were up significantly by 13%.

Minor Cheese Limited

Our cheese factory had sales that were up 12% in 2011.

Year

Sales Baht Million

2011

5,110

2010

4,439

2009

4,257

Year

Sales Baht Million

2011

2,848

2010

2,576

2009

2,481

Year

Sales SGD Million

2011

105

2010

103

2009

115

Year

Sales AUD Million

2011

334

2010

292

2009

251

Year

Sales Baht Million

2011

2,247

2010

1,958

2009

1,720

Year

Sales Baht Million

2011

1,202

2010

986

2009

875

Year

Sales Baht Million

2011

953

2010

816

2009

765

Year

Sales Baht Million

2011

717

2010

661

2009

581

Year

Sales Baht Million

2011

930

2010

825

2009

813

Year

Sales Baht Million

2011

502

2010

447

2009

412

Managed/Franchise


Retail

Direct-Owned

Esprit

Our largest fashion brand had sales of Baht 592 million in 2011. Bossini

Sales of this leading fashion brand were Baht 241 million.

GAP

Sales of Gap increased by 127% to Baht 349 million.

Charles & Keith

Sales of Charles & Keith footware increased by 71% to Baht 246 million. Red Earth, Bloom, Smashbox

Our portfolio of leading cosmetics brands combined for sales of Baht 143 million.

Zwilling J.A. Henckels

Sales from our luxury household supplies and kitchenware brand were Baht 39 million in 2011. ETL Learning

Sales of ETL Learning were Baht 220 million in 2011.

Tumi

The world’s premier luggage brand anchors our line of luxury lifestyle brands. NMT

NMT

Our contract manufacturing business which supplies global FMCG companies was affected by the floods and sales declined in 2011.

Year

Sales Baht Million

2011

592

2010

565

2009

477

Year

Sales Baht Million

2011

241

2010

243

2009

238

Year

Sales Baht Million

2011

349

2010

154

2009

-

Year

Sales Baht Million

2011

246

2010

144

2009

117

Year

Sales Baht Million

2011

143

2010

146

2009

142

Year

Sales Baht Million

2011

39

2010

36

2009

37

Year

Sales Baht Million

2011

220

2010

217

2009

148

Year

Sales Baht Million

2011

39

2010

29

2009

32

Year

Sales Baht Million

2011

1,024

2010

1,087

2009

1,278


Minor International Footprint

turkey jordan uae Morocco egypt

saudi arabia

oman

Food

Hotel & Spa

Tanzania


china

Vietnam india

thailand

cambodia

philippines

sri lanka

maldives malaysia singapore

indonesia

australia

new zealand


Contents 004

Minor International Footprint

008

Financial Highlights

009

Financial Status at a Glance

010

Chairman’s Message

016

Hospitality Business

026

Restaurant Business

032

Retail Business

036

Our Journey to Sustainability

046

Report of the Board of Directors’ Responsibilities for Financial Statements

047

Report of the Audit Committee

049

Auditor’s Report

050

Financial Statements

154

Management Discussion & Analysis

169

Connected Transactions

182

Nature of Business

183

Major Events in 2011

184

Risk Factors

189

Good Corporate Governance

198

Shareholders’ Structure and Management

210

Subsidiaries, Associated and Affiliated Companies

228

Corporate Information


Core Values

Customer Focus Result Oriented People Development Innovative Partnership

Vision To be a leading international hospitality and lifestyle operator by delivering branded products and services that provide 100% SATISFACTION to all stakeholders. Delivering premium branded hospitality services, restaurant concepts and lifestyle products globally

Every year, over 25,000 service professionals at 75 hotels, 1,257 restaurants and 247 retail outlets have the pleasure of serving more than 90 million customers in 22 countries.


008

2011 Annual Report

Financial Highlights Consolidated

(Baht Million)

Net Sales Total Revenues Gross Profit EBITDA EBIT Foreign Exchange (Gain) Loss Net Profit Total Assets Total Liabilities Interest Bearing Debt Total Equity Net Cash Flow from Operating Activities

Profitability Ratio Gross Profit Margin

(Percentage)

Net Profit Margin Return on Total Assets (ROA) Return on Equity (ROE)

Debt to Equity

Interest Bearing Debt/Equity Ratio Long Term Debt/Equity Ratio Gearing Ratio

Ratio

(Times) Per Share Data

(Baht)

Share Capital

Earnings per Share Book Value per Share Dividends per Share Dividend Payout Ratio (%)

Par Value (Thousand Shares) Registered Ordinary Shares Registered Preferred Shares Number of Ordinary Shares Outstanding Number of Preferred Shares Outstanding Number of Weighted Average Ordinary Shares Outstanding Number of Weighted Average Preferred Shares Outstanding Number of Warrants Outstanding • Offered to Existing Shareholders • Offered to Employee Stock Option Program Notes: 1. 2. 3.

2007

2008

2009

2010

2011

13,538 14,029 8,980 3,759 2,463 5 1,611 21,280 11,572 8,335 9,708 2,364

15,814 16,399 10,521 4,303 2,924 (64) 1,892 25,064 12,760 9,101 12,304 3,388

16,460 17,244 10,671 3,791 2,230 (15) 1,400 28,271 16,217 11,530 12,054 2,795

18,140 19,089 11,250 3,633 2,061 (3) 1,236 32,799 19,043 14,368 13,756 2,537

26,137 28,332 16,052 6,201 4,221 40 2,880 40,865 25,931 19,824 14,935 3,813

66.33 11.48 8.25 18.07

66.53 11.54 8.17 17.19

64.83 8.12 5.25 11.50

62.02 6.48 4.05 9.58

61.41 10.17 7.82 20.08

0.86 0.76 1.19

0.74 0.64 1.04

0.96 0.79 1.35

1.04 0.94 1.38

1.33 1.16 1.74

0.51 3.21 0.25 48.65

0.56 3.40 0.31 55.07

0.43 3.71 0.15 35.01

0.38 4.22 0.15 39.49

0.88 4.56 0.25 28.39

1 1 1 1 1 3,275,302 3,689,623 3,351,851 3,677,989 3,666,520 63,520 - - - 2,958,216 3,614,264 3,246,416 3,262,339 3,275,225 63,520 - - - 2,762,173 3,361,793 3,268,811 3,255,950 3,270,879 63,520

-

-

239,140

-

- 325,382 325,380

62,065

38,066

66,524

-

78,080

-

52,717

Dividends per share for the year 2007 are consisted of cash dividend at Baht 0.15 per share and share dividend at Baht 0.10 per share. Dividend per share for the performance Year 2011 consisted of cash dividend at Baht 0.15 per share and stock dividend at 10:1 (Baht 0.10 per share) The above 2011 dividend per share is relied to MINT Board of Director’s resolution on 21 February 2012 and this dividend per share will be brought to the Annual General Meeting for Shareholders on 2 April 2012. Dividend payout ratio is calculated from dividend per share divided by earnings per share.


Minor International Public company limited

009

Financial Status at a Glance Consolidated Statements of Cash Flow

For the Year Ended 31 December 2011 (Baht Million) Net Cash Inflows from Operating Activities 3,814 Net Cash Payment for Investing Activities (1) (6,539) Net Cash Receipts from Financing Activities (2) 2,670 Net decrease in Cash & Cash Equivalents (55) Gain on exchange on Cash & Cash Equivalents 40 Cash & Cash Equivalents on 31 December 2010 1,154 Cash & Cash Equivalents on 31 December 2011 1,139 Consolidated Statements of Financial Position

As at 31 December 2010 (Baht Million) Assets Cash & Cash Equivalents 1,154 Other Current Assets 5,691 Investments & Other 10,814 Property Plant and Equipment 15,138 Total Assets 32,797 Liabilities & Equities Current Liabilities 6,057 Non-current Liabilities 12,984 Share Capital, Premium & Reserves 6,903 Retained Earnings - net 5,971 Non-Controlling Interests 882 Total Liabilities & Equities 32,797

Consolidated Statements of Income

For the Year Ended 31 December 2011 (Baht Million) Revenues 28,068 Gross Operating Profit 16,801 S&A Expenses 12,844 Operating Profit Profit Sharing

3,957 264

Earnings Before Financial Costs and Tax Financial Costs

4,221 879

Earnings Before Tax Corporate Tax Non-Controlling Interests

3,342 415 47

Net Profit

2,880

Consolidated Statements of Financial Position

As at 31 December 2011 (Baht Million) Assets Cash & Cash Equivalents 1,139 Other Current Assets (4) 6,460 Investments & Other (5) 15,155 Property Plant and Equipment (6) 18,104 Total Assets 40,858 Liabilities & Equities Current Liabilities Non-current Liabilities (7) Share Capital, Premium & Reserves (8) Retained Earnings - net Non-Controlling Interests Total Liabilities & Equities

8,580 17,344 6,006 8,361 567 40,858

Retained Earnings

As at 31 December 2011

(Baht Million) Balance as at 31 December 2010 5,971 Net Profit for 2011 2,880 Dividends (3) (490) Balance as at 31 December 2011 8,361 Notes

(1) Additional investment of Baht 2,982 million in subsidiaries, Baht 458 million in Joint Venture, Baht 27 million in others and new PPE purchase of Baht 2,779 million. (2) Net cash from Financing activities of Baht 2,670 million primarily from borrowings for investment in subsidiaries and issuances of debentures to repay long term loan and redeem debenture. (3) In 2011, the Company paid dividend in April (Baht 0.15 per share), total dividend payment amount of Baht 490 million. (4) Other current assets increased Baht 769 million primarily due to increase in Trade and Other Receivable from consolidation of Oaks Hotels and Resorts from May 2011.

(5) Investments & others increased Baht 4,341 million primarily from acquisition investment in subsidiaries and others of Baht 485 million and increase in intangible asset - management letting rights and goodwill from consolidation of Oaks Hotels and Resorts. (6) Total net fixed assets increased Baht 2,966 million from new construction in hotel group of Baht 2,160 million, expansion of food group of Baht 724 million, expansion of distribution and manufacturing of Baht 130 million and consolidation of Oaks Hotels & Resorts of 1,697 million with reduction of depreciation of Baht 1,745 million.

(7) Long-term liabilities increased Baht 4,360 million due to long term borrowings drawn for investment in subsidiaries, issuance of new debentures to repay long term borrowings and to redeem debentures, and consolidation of borrowings from Oaks Hotels & Resorts. (8) Share Capital, Premium & Reserves decreased Baht 897 million in 2011, primarily due to reclassification of fair value reserve for investment in S&P Syndicate Pcl. of Baht 1,054 million to realize gain while increased capital of Baht 90 million from exercise of ESOP.


010

2011 Annual Report

Chairman’s Message

Anantara Dhigu Resort & Spa, Maldives


Minor International Public company limited

011

Dear fellow stakeholders:

I am delighted to report that despite another year of what seemed to be unimaginable challenges, 2011 was our best year ever. Again, the political and economic uncertainties we faced in 2009 and 2010 continued to affect tourism and consumer confidence. On top of this, Thailand experienced its worst floods in decades with more than 40% of Thailand’s total land area and large parts of Bangkok submerged for weeks in November. Despite all of this, Minor International’s net profit increased 133% to a record Baht 2,880 million. In 2011, our businesses, including 75 hotels and serviced apartments and 1,257 restaurants across 23 countries, again proved resilient. In the fourth quarter, most of our businesses were affected by the floods and, as a result, we experienced a sudden increase in costs and had to book a Baht 238 million write-off. Despite this increase in expenses, core net profit, excluding extraordinary items such as a gain from a reclassification of our investment in S&P Syndicate Pcl. (S&P) and a goodwill impairment related to our restaurant business in China, was up 55% to Baht 1,919 million. The hospitality business, including those related to hotel operations, hotel management, service apartments, residential property sales, vacation club and spas, achieved a 139% increase in profit. At the same time, the restaurant business had another great year with profit that was up 160%. Excluding extraordinary items such as the gain from S&P and the goodwill impairment in China, profit from the restaurant business increased by 24%. Despite such strong performance, we continued to build for the future. Years from now, I think that when we look back on 2011, we will see that this was a defining year and one where our accomplishments firmly created the foundation for many years of future growth. I will highlight some of the most significant strategic achievements of 2011. William E. Heinecke Chairman and Chief Executive Officer


012

2011 Annual Report

Oaks Hotels & Resorts, Pacific Blue

Anantara Kihavah Resorts & Spa, Maldives


Minor International Public company limited

CONSOLIDATED REVENUES

Consolidated NET Profit

(in Baht million)

(in Baht million)

2,880

28,332

19,089 16,515

1,890

17,290 1,611

14,029

2006

1,400

1,280

12,395

2007

2008

013

2009

2010

2011

2006

1,240

2007

2008

2009

2010

2011

• We invested US$ 90 million to acquire a 100% • In early 2011, we launched the Anantara

stake in Australia’s leading hospitality operator. The acquisition of Oaks Hotels and Resorts (Oaks) contributed to a sharp increase in total profit and it gave us a strong foothold in a growing hospitality market. The investment diversified our portfolio beyond our traditional Thailand base, with hotel and mixed use profits from Thailand declining from 87% to 66% following the acquisition. The Oaks brand will help to drive future growth and I am convinced that, like our own Anantara brand, Oaks will also be able to expand to Asia and the Middle East.

• Our efforts to compete in Thailand’s market for

luxury branded residential properties were proven successful with the St. Regis Residences in Bangkok. In 2011, we sold 55% of the total sellable area at the Residences and this contributed significantly to the increase in total net profit. Once a niche business, luxury branded residential sales are now a core part of our hospitality portfolio and we are already planning our next large scale residential development.

Vacation Club to leverage the reputation and international appeal of the Anantara brand. It has since significantly outperformed our expectations while giving us the ability to better leverage what we offer at our Anantara properties. We expect Anantara Vacation Club to contribute significantly to our performance over the next few years.

• We also launched a new hotel brand to fill

a niche in the branded up-scale market for hotels and resorts. Having opened our first Avani at the end of 2011, we were delighted with the response from the media and consumers. Many of our partners who already have Anantara or Oaks properties have already expressed strong interest in Avani. Today, we have three resort concepts operating under the Anantara, Oaks and Avani brand names and we are well positioned to compete in diverse international markets and serve different consumer segments.


014

2011 Annual Report


Minor International Public company limited

015

2011 Revenue breakdown

39%

Restaurant

10%

Retail Trading and Manufacturing

3% 4%

Other Income

Gain from Fair Value Adjustment on Investment in S&P

43%

1%

Share of Profit

Hotel & Mixed Use

• In addition to the acquisition of Oaks, which

has geographically diversified our hospitality business, we also made two other acquisitions that helped to strengthen our restaurant business. In 2011, our Coffee Club joint venture in Australia acquired a 100% stake in Ribs and Rumps for US$ 12 million. This acquisition transformed The Coffee Club into a multiple brand restaurant company with the capacity to expand two brands. At the same time, we invested S$ 17 million to increase our stake in Thai Express from 70% to 100%.

• We increased our shareholding in S&P Syndicate

(S&P), a restaurant company listed on the Stock Exchange of Thailand, by 5% to 31% through a voluntary tender offer. The investment in S&P was our first investment after making “acquisitions” a core part of our overall corporate strategy and we are delighted with its success. Since making the acquisition in 2006, S&P’s share price has increased from Baht 29 to Baht 70 per share and, as a result, we were able to realize a Baht 1,054 million gain in 2011.

Despite the global economic uncertainties and relative instability in Thailand, we believe that 2011 was the right time to launch these businesses. We moved aggressively into Australia with the acquisition of Oaks.

We proved we could successfully develop luxury residential properties and this has compelled us to do more. With Anantara Vacation Club and Avani, we expanded into new businesses that will eventually develop into core businesses. I believe that these investments have created opportunities for significant future growth and I am confident that 2012 will be another very good year. On behalf of our shareholders, I would like to extend thanks to our team of more than 25,000 professionals who embody the Minor Drive Culture by working across so many different business areas with a passion for expanding and diversifying our businesses while always providing services that exceed customer expectations. They help our company persevere while always pushing the Company to be more dynamic and international. As we look to 2012 and beyond, I have great faith in their ability to take Minor International to higher levels and achieve greater results in the future.

William E. Heinecke

Chairman and Chief Executive Officer March 2012


016

2011 Annual Report

Hospitality Business

Sector Overview and Competition

Sector Overview and competition

For another year, the Thai hospitality sector was forced to confront challenges associated with one of the worst financial crises the world has seen in 100 years. Fortunately, the social and political issues that have so severely affected Thai tourism over the past few years were somewhat less severe in 2011. Thailand held peaceful elections in May and political protests throughout the year were considerably more subdued. As a result, visitors to Thailand increased by 20%. In 2011, the increase in visitors to Thailand was driven primarily by arrivals from Asia including China, Japan, Korea and India. Visitors from Europe and North America were only up slightly as economic uncertainty in these regions continued. Throughout the year, we endeavoured to gain access to new emerging markets in order to soften the impact on our traditional key markets. Through strong public relations and sales activities, we strengthened our presence in new markets and thus reduced our dependence on visitors from Europe and North America. Since the acquisition of Oaks Hotels and Resorts in March, the Australian hospitality sector has become a significant market for Minor International. With more than 5,000 rooms under management, Oaks now accounts for more than 50% of all rooms owned and managed by Minor International. Unlike the Thai tourism sector, which largely depends on international visitors, the Australian tourism sector depends primarily on domestic Australian tourism and business travel. Indeed, 73% of gross domestic product from tourism comes from Australian’s traveling within Australia. In 2011, domestic in-country tourism increased by 2.2% compared to an average annual growth rate of only 0.5% over the past 10 years. development of the thai tourist market (Visitors in millions)

19.1

13.8 8.6

1999

9.5

2000

10.1

2001

10.8

2002

11.7 10.0

2003

2004

14.5

14.6

15.9 14.1

11.5

2005

2006

2007

2008

2009

2010

911 Bali SARs Tsunami London BKK Sub-prime Domestic Global Domestic Bomb Bomb Bomb Crisis Politics Recession Politics Coup Airport Closure

2011 Floods

Sources: • Tourism Authority of Thailand • Bank of Thailand


Minor International Public company limited

017

Anantara Veli Resort & Spa, Maldives


018

2011 Annual Report

development of the Domestic Australian tourist market (Domestic visitor nights in millions)

259.5

260.7

262.2

263.3

264.1

264.8

265.4

2014F

2015F

2016F

266.0

266.6

267.1

2017F

2018F

2019F

267.7

256.7

2009

2010

2011F

2012F

2013F

2020F

Source: Department of Resources, Energy and Tourism, Australia

Note: F = Forecast

Performance Highlights and

Following the acquisition of Oaks, our “system� of company-owned and managed resorts increased from 37 to 75 properties and the hospitality business expanded from eight to ten countries. Since Oaks manages most of the properties in its portfolio, the difference between systemwide hotel sales and net hotel revenues increased significantly. During the past year, for example, sales from company-owned and managed hotels (ie, systemwide sales) increased by 106% to Baht 13,792 million while revenues from company-owned hotels and management fees were Baht 8,464 million.

Development Plans

In 2011, revenues from our hospitality business more than doubled to Baht 12,657 million and profits increased by 139%. The acquisition of Oaks and the sale of residential properties were the primary factors behind this increase in revenues and net profit. Revenue from Oaks, of which we consolidated 100% for only 7 months, amounted to Baht 2,897 million while revenues from the sale of the St. Regis Residences increased from Baht 143 million in 2010 to Baht 2,342 million in 2011.

Garden Pool Villa, Anantara Phuket Villas

Living Area, St.Regis Residences Bangkok


Minor International Public company limited

Today, our hospitality group is diversified across five core hospitality businesses including 1) owning hotels and resorts, 2) owning 100% of Oaks in Australia, 3) managing hotels and resorts owned by others, 4) developing luxury branded residential properties and 5) developing vacation club shared ownership properties. Company-Owned Resorts: In 2011, our 28 company-owned Anantara, Four Seasons, Marriott and St. Regis hotels and resorts had revenues that were up by 25% to Baht 5,577 million.

019

As these new properties mature and grow in reputation, they will quickly become profitable and contribute significantly to the total profit generated from companyowned properties. With the addition of the St. Regis, our portfolio of hotels and resorts continues to be one of the best in the world. We continue to receive awards from leading travel publications such as Conde Nast Traveller and Travel + Leisure.

We opened two major company-owned properties in 2011. In February, we opened a 78 pool villa Anantara resort in the Maldives and, in April, we opened a 224 room St. Regis Hotel in Bangkok. Together, these two new resorts combined for Baht 758 million in revenue.

In the second quarter of 2011, we completed the acquisition of Oaks. With 38 properties and over 5,000 rooms, Minor International added a well established upscale serviced apartment brand to our hospitality portfolio while giving us exposure to all the gateway cities and regional hubs in Australia, New Zealand and the UAE.

Like almost all new hotels and resorts, the new Anantara and the St. Regis were unprofitable in the first few months after opening. Fortunately, the losses from these new properties were more than offset by the profit from all of our other company-owned resorts.

The acquisition underpinned the expansion of our hospitality business and significantly contributed to the revenue and profit growth of the group. In the seven months since completing the acquisition, Oaks’ revenues amounted to Baht 2,897 million or 23% of total revenues

Oaks Hotels and Resorts:

Anantara Seminyak Resort & Spa, Bali


020

2011 Annual Report

Company-owned and managed hotel revenues (in Baht billion)

13.8

8.3 6.4 5.8 4.7

7.0

5.1

2006

4.8

2007

Net hotel revenues Systemwide hotel sales

Four Seasons, Koh Samui

2008

6.7

6.1

5.9

2009

4.6

2010

2011

Note: Systemwide hotel sales includes sales from company-owned and managed hotels. Net hotel revenues includes only sales from company-owned hotels and management fees.

Anantara, Koh Samui


Minor International Public company limited

for our hospitality group and profit was Baht 342 million. This profit accounted for 30% of hospitality profit and 12% Minor International’s total net profit.

Hotel Management: Revenues from management

fees increased by 34% to Baht 330 million. Excluding the hotels and resorts we manage under the Oaks brand, we currently manage 22 resorts of which 17 of them are Anantaras operating in Thailand, the Maldives, Bali, Indonesia, Vietnam and the UAE. With commitments for us to manage more Anantara properties over the next five years, we expect to have more than 50 Anantara hotels and resorts operating in more than 10 countries by 2017. By then, we expect to have Anantaras operating in prime inner-city locations as well as leading resort destinations not only in Thailand, Vietnam, the UAE, Bali, and the Maldives but also in China, India, Mauritius, Sri Lanka, Laos and Oman. We are delighted with the development of the Anantara brand and it is fast becoming a major Asian and Middle Eastern hotel and resort brand.

021

Over the next year, six of the properties in our pipeline will complete construction and allow us to finally take responsibility for managing them. As the number of properties we manage increases, the fees from these new properties will contribute significantly to hospitality group profits in the future. Residential property sales contributed most significantly to the growth in hospitality revenue and profit in 2011. In the past year, we sold 55% of our total residential property inventory and, as a result, residential revenue increased from Baht 143 million in 2010 to Baht 2,342 million.

Residential Property:

We will market all of our residential properties to potential buyers who continue to express strong interest in luxury residential properties despite global economic uncertainty. The recent success of our residential projects has significantly enhanced the profile and returns on our wholly-owned resort properties. Today, when we make decisions about which hotel or resort to develop next, our decisions are influenced, in large part, by our ability to also include a residential component.

JW Marriott, Phuket


022

2011 Annual Report

Our residential inventory, which includes seven villas that are located next to our Four Seasons in Samui and 20 luxury residences that are connected to our St. Regis Hotel in Bangkok, will contribute significantly to revenue and profit over the next few years. In the meantime, plans are being finalized for the development of another large hotel/residential project which, once completed, will maintain high residential revenue and profit through at least 2017. Vacation Club: With the Anantara brand expanding by 5 - 10 properties each year, we continue to see a great opportunity for our Anantara branded vacation club business. The Anantara Vacation Club was launched in December 2010 to give our guests the opportunity to indulge themselves in a longer term,

more economical lifestyle experience. The Anantara Vacation Club provides our guests with the comfort of secured holidays at today’s values, the opportunity to belong to a unique lifestyle club and substantial savings on pre-paid holidays whilst generating incremental income for our hotels. After selling Anantara Vacation Club for the entire 12 months of 2011, we achieved sales of Baht 524 million. We sold almost two times more than we had budgeted at prices that were higher than we had projected. As the reputation of the Anantara Vacation Club grows and as the properties in our pipeline open, our vacation club business will grow and every year contribute meaningfully to hospitality revenue and profit.

Recent awards for minor international hotels

Serengeti Migration Camp and Four Seasons Chiang Mai: World’s Best Awards 2011 – Top 50 hotels Four Seasons Bangkok, Four Seasons Chiang Mai, Anantara Golden Triangle and JW Marriott Phuket: T+L 500 Best Hotels 2012 Four Seasons Tented Camp, Chiang Rai and Four Seasons, Chiang Mai: Condé Nast’s Gold List 2011

Anantara Si Kao, Trang

Wildlife Encounters, Anantara Desert Islands


Minor International Public company limited

023

Anantara Seminyak: number 4 in the Top 25 Trendiest Hotels for the Indonesia region and number 8 in the Top 25 Luxury Hotels for the Indonesia region Minor International: Best Developer in Thailand The Residences at Four Seasons Chiang Mai: Best Residential Development in Chiang Mai The Residences at St. Regis Bangkok: Best Condominium Thailand, Best Luxury Condominium Development in Bangkok and Best Interior Design in South East Asia Anantara Vacation Club Bophut: Best Shared Ownership Development Four Seasons Koh Samui: Asia’s Leading Beach Resort Anantara Golden Triangle: Thailand’s Leading Resort

St. Regis Hotel Bangkok: 2011 Luxe List - Thailand

The Residences at The St. Regis Bangkok: “Highly Commended” awards in two categories - Development of Multiple Units in Thailand and Apartment in Thailand

The Residences at Four Seasons Resort Chiang Mai: Top 20 Resort Properties by Property Report South East Asia Magazine

Anantara Rasananda, Phangan


024

2011 Annual Report

Hotel & Residential Development Plan Existing Hotel Portfolio Hotel

2010

2011

Thailand Thailand Thailand Thailand Thailand Thailand Thailand Thailand Thailand Thailand Thailand Thailand Thailand Maldives Sri Lanka 15 Maldives Maldives Maldives Vietnam Sri Lanka Sri Lanka Sri Lanka Tanzania Tanzania Tanzania Tanzania Kenya Zanzibar 13 Thailand Thailand Thailand Thailand Thailand Vietnam Indonesia UAE UAE 9 Australia 38

Four Seasons Bangkok Four Seasons Chiang Mai Four Seasons Tented Camp Chiang Rai Four Seasons Koh Samui JW Marriott Phuket Pattaya Marriott Hua Hin Marriott St. Regis Hotel Anantara Bangkok Riverside Resort & Spa Anantara Hua Hin Anantara Golden Triangle Anantara Koh Samui Anantara Phuket Anantara Kihavah Avani Kalutara Majority Owned Anantara Veli Anantara Dhigu Naladhu Resort Harbour View Hotel Avani Bentota Club Hotel Dolphin Hotel Sigiriya Arusha Coffee Lodge Serengeti Migration Camp Tarangire Tree Top The Manor at Ngorongoro AfroChic Retreat Kilindi Joint Venture Anantara Sikao Resort & Spa Anantara Baan Rajprasong, Bangkok Anantara Lawana Anantara Sathorn Anantara Rasananda Anantara Mui Ne Anantara Seminyak, Bali Desert Islands by Anantara Qasr Al Sarab Desert by Anantara Purely Managed Oaks Management Letting Rights

354 76 15 60 265 298 219 - 413 187 77 106 83 - 105 2,258 50 110 19 122 90 146 79 18 20 20 20 20 19 733 138 97 122 436 - - 60 64 206 1,123 - -

354 76 15 60 265 298 219 224 407 187 77 106 83 78 105 2,554 50 110 19 122 90 146 79 18 20 20 20 20 19 733 139 97 122 436 44 89 60 64 206 1,257 5,277 5,277

354 76 15 60 265 298 219 224 407 187 77 106 83 78 105 2,554 50 110 19 122 90 146 79 18 20 20 20 20 19 733 139 97 122 436 44 89 60 64 206 1,257 5,377 5,377

354 76 15 60 265 298 - 224 407 187 77 106 83 78 105 2,335 50 110 19 122 90 146 79 18 20 20 20 20 19 733 139 97 122 436 64 89 60 64 206 1,277 5,377 5,377

354 76 15 60 265 298 - 224 407 187 77 106 83 78 105 2,335 50 110 19 122 90 146 79 18 20 20 20 20 19 733 139 97 122 436 64 89 60 64 206 1,277 5,377 5,377

Total - Existing Hotel

4,114

9,821

9,921

9,722

9,722

75 F = Forecast

2012F

2013F

2014F

Country


Minor International Public company limited

025

Hotel & Residential Development Plan

Country

Hotel

2010

2011

2012F

2013F

Sri Lanka Australia 2 Kenya Kenya Kenya Tanzania 4 China China Indonesia UAE UAE UAE Oman Laos China China India India Oman Mauritius China China Oman 17

Anantara Sri Lanka 80 Grand Hotel, Gladstone Australia 96 Majority Owned - - - 176 Masai Mara Camp 16 16 Amboseli Camp 16 16 Meru 16 Serengethi Migration Camp Explorer 20 Joint Venture - - 32 68 Anantara Xishuangbanna 103 103 Anantara Sanya 122 122 Anantara Uluwatu, Bali 77 77 Anantara Al Yamm 30 30 Anantara Al Sahael 30 30 Anantara Eastern Mangroves 222 222 Anantara Al Madina A’Zarqua, Blue City 120 Anantara Luang Prabang 105 Anantara E-Mei 150 Anantara Chongqing 150 Anantara Wayanad 95 Anantara Mahabalipuram 130 Anantara Al Baleed 136 Anantara La Chaland 160 Anantara Qiandao Lake Anantara Baoting Anantara Al Akhdar Purely Managed - - 584 1,630

2014F

150 96 246 16 16 16 20 68 103 122 77 30 30 222 120 105 150 150 95 130 136 160 104 130 134 1,998

23 Total - Hotel Development Plan - - 616 1,874 2,312 Residential Properties Country

Residential

2010

2011

2012F

2013F

2014F

Thailand The Estates Samui 14 14 14 14 Thailand St. Regis Residence 53 53 53 53 2 Total - Residential 67 67 67 67

14 53 67

Vacation Club Properties

Country

Vacation Club

2011

2012F

2013F

2014F

Thailand Thailand Australia Thailand

AVC - Samui 20 AVC - Phuket 2 AVC - Queenstown 3 AVC - Bangkok AVC - New Destinations Total - Vacation Club - 25

20 12 3 13 7 55

20 52 3 16 32 123

20 93 3 16 66 198

F = Forecast

2010


026

2011 Annual Report

Restaurant Business

Sector Overview and Competition

Thailand Sector Overview and competition

2011 was a good year for the Thai food service industry. We estimate that industry wide same store sales increased by 5% and that the addition of new restaurant outlets resulted in total sales growth of approximately 10%. For 2012, we expect that industry wide total sales growth will be 8%, slightly lower than growth in 2011, with same store sales growth of 4%.

Comparative Market Share in Thai QSR Market

2009

Revenue (Baht Million) Chicken Hamburger Pizza Ice Cream Others (incl Sizzler) Total Market MFG PCL

Revenue 9,188 4,673 5,277 3,674 5,859 28,670 9,171

(%) 32.0 16.3 18.4 12.8 20.4 100.0 32.0

Revenue 10,781 5,103 5,771 3,813 6,013 31,481 9,932

2010

(%) 34.2 16.2 18.3 12.1 19.1 100.0 31.5

Revenue 11,669 5,472 6,093 4,034 6,521 33,790 11,502

2011F

(%) 34.5 16.2 18.0 11.9 19.3 100.0 33.3

Source: Ministry of Commerce and industry estimates, MFG sales includes its own domestic franchisees. minor food group REVENUES

(Baht Billion)

28.6 24.1 21.9 19.3

11.7 9.2

3.5 3.8

3.9 4.3

4.2 3.8

2001

2002

2003

5.2

6.2

2004

7.5 5.8

2005

7.0

2006

12.9

14.4

Net Restaurant Sales Systemwide Restaurant Sales

10.1 10.0 7.5

2007

2008

2009

2010

2011

Note: Systemwide restaurant sales includes sales from company-owned and franchised restaurant outlets. Net sales only includes sales from company-owned restaurants.


Minor International Public company limited

027


028

2011 Annual Report

Performance Highlights and Development Plans

Revenues at our wholly-owned restaurant company, the Minor Food Group, excluding an extraordinary gain from reclassification of investment in S&P increased by 11% to Baht 11,689 million while net profit excluding extraordinary items increased by 24%. All of our brands performed well in 2011. System wide sales increased by 14.1% to Baht 28,578 million and average same stores sales across all of our brands was up by 9%. Had the floods not forced the temporary closure of more than 120 outlets and disrupted supply chain operations, the Food Group would have had an even better year. Today, we have 1,257 restaurants in Thailand, Singapore, Australia and 15 other countries that operate under a diverse portfolio of 10 brands. These brands are managed by thousands of very talented people who continuously drive for business success. They think like entrepreneurs, execute professionally and find ways to unlock impossibilities. They are the essence of what we call the Minor Drive Culture.

The restaurant business requires good people and we have some of the best. Thanks to the Drive Culture, our restaurant business is stronger than ever and we have been widely recognized for management and business success.

• In 2011, The Minor Food Group joined the Palladium Balanced Scorecard Hall of Fame.

Swensen’s and Sizzler won awards for best employer from AON Hewitt.

The Pizza Company was International Franchisor of the Year by the Franchising and Licensing Association (Singapore).

Dairy Queen named Minor as their International Franchisee of the Year.

Thai Express was recognized by Singapore SME 1000 for excellence in sales and net profit.


Minor International Public company limited

029

Thailand

Singapore and Australia

Thailand continues to be our largest market and it accounts for more than 70% of total Food Group profit. With 831 restaurants operating under the Pizza Company, Swensen’s, Sizzler, Dairy Queen, Burger King and The Coffee Club brands, we account for more than 30% share of the Thai western quick serve restaurant market. In 2011, our restaurant business in Thailand achieved an 11.8% increase in system wide sales.

While the Food Group remains strong and very profitable in Thailand, it also has a large and growing business internationally. In addition to the outlets in Thailand, we have 426 outlets internationally. In Australia and Singapore, we own 50% of The Coffee Club and 100% of Thai Express, respectively. We also have 63 Pizza Company and Swensen’s outlets operating in 9 countries across the Middle East, India, China and Southeast Asia.

In Thailand, our best performing brands were The Pizza Company, Sizzler and Dairy Queen. The Pizza Company, which is our largest brand in Thailand by sales and profit, opened 29 new outlets and achieved a 28% increase in operating profit. At the same time, Sizzler and Dairy Queen also performed very well with operating profit increases of 53% and 25%, respectively.

In December 2011, we increased our shareholding in Thai Express from 70% to 100%. With 54 company-owned and 15 franchised outlets, Thai Express continues to be one of Singapore’s largest and most successful restaurant companies. 2011 was another difficult year for Thai Express as the recent increase in retail centers has resulted in a intensely competitive market for restaurant operators. Operating profit at Thai Express was down 3% in 2011. Our focus in Singapore is to maintain our leading position in that market while expanding Thai Express internationally. In December, we opened Thai Express restaurants in China and Korea and these outlets have since performed extremely well.

In early 2011, we launched franchising for Dairy Queen and succeeded in opening 26 new outlets. With 263 Dairy Queen outlets already in Thailand, we plan to double the number of Dairy Queen outlets in Thailand over the next five years.


030

2011 Annual Report

In Australia, the Coffee Club has achieved operating profit increases of 34% and 27% over the past two years, respectively. At the end of 2011, there were 280 outlets in Australia, New Zealand and New Caledonia, six outlets in Thailand and one outlet in China. Also in 2011, the Coffee Club acquired 100% of a very profitable steakhouse brand that operates 7 restaurants under the Ribs and Rumps brand name. The Coffee Club expects to leverage its strong understanding of the Australian market and large network of franchisees to develop both brands simultaneously. Over time and with multiple brands, we expect that The Coffee Club in Australia will grow and succeed in doing what the Minor Food Group has done in Thailand.

Other Markets

With the exception of Thailand, Singapore, Australia and Beijing, where we have company-owned outlets, we continue to explore ways to expand internationally through acquisitions and franchising. Our acquisitions of The Coffee Club and Thai Express have helped to increase the profitability of the Food Group by almost 40% while also transforming it into a more diverse and more international company. We will continue to pursue acquisitions such as these while, at the same time, expanding our core Pizza Company, Swensen’s, The Coffee Club and Thai Express brands internationally through franchising.

mfg system-wide outlet development program Number of Outlets

2010

2011

Domestic - Equity 591 616 - Franchise 170 215 International - Equity 94 95 - Franchise 293 331 Total Outlets 1,148 1,257

2012F

719 280 119 472 1,590


Minor International Public company limited

Number of Outlets

Equity The Pizza Company Swensen’s Sizzler Dairy Queen Burger King The Coffee Club Ribs & Rumps Thai Express Others* Franchise The Pizza Company Swensen’s Sizzler Dairy Queen Burger King The Coffee Club Ribs & Rumps Thai Express Others* Total Outlets Note: F = Forecast * Others include restaurant operator at airports.

031

2010

2011

2012F

685 169 112 44 243 26 19 - 60 12 463 79 130 - - - 243 - 11 - 1,148

711 189 118 45 237 27 19 7 54 15 546 88 149 - 26 - 268 - 15 - 1,257

838 206 121 49 223 28 32 11 59 109 752 105 193 72 312 2 19 49 1,590


032

2011 Annual Report

Retail Business

Sector Overview and Competition

Sector Overview

For Thai retail and manufacturing, 2011 was a somewhat better year than 2010. Although consumer confidence was up slightly and the political situation was more predictable, the November floods served to depress the Thai retail market and consumption during the holidays. Consumer Confidence Index

100 90 80 70 60 Sep-11

May-11

Jan-11

Sep-10

May-10

Jan-10

Sep-09

May-09

Jan-09

Sep-08

May-08

Jan-08

Sep-07

May-07

Jan-07

Sep-06

May-06

Jan-06

Sep-05

May-05

Jan-05

50

Source: Thai Chamber of Commerce University, Bank of Thailand

For the most part, the competitive landscape remained largely unchanged. Most retail brands continued to expand during 2011 in order to follow the development of new and renovated shopping malls, largely in the Greater Bangkok area. New arrivals of bigger international fashion retailers with large store formats put competitive pressure on the lower end of the mass apparel market, both in terms of pricing and marketing strategies. In addition, the floods resulted in an increase in discount activities across the market to help retail brands clear inventory. This trend will continue into early 2012.


Minor International Public company limited

033


034

2011 Annual Report

Retail Performance

Our wholly-owned retail business, Minor Corporation, is one of Thailand’s leading lifestyle brand distributors and contract manufacturers. It sells fashion and cosmetics brands such as Gap, Esprit, Bossini, Charles & Keith, Tumi, Red Earth and Bloom and makes household products for some of the world’s largest fast moving consumer goods (FMCG) companies. In the first nine months of 2011, Minor Corporation achieved a net profit of Baht 76 million and this was up significantly from the net profit of Baht 21 million achieved during the first nine months of 2010. Following the November floods, which damaged our contract manufacturing facility and some facilities where we store retail inventory, Minor Corporation reported 2011 full year loss of Baht 110 million. Had our factory and inventories not been affected by the floods, Minor Corporation would have booked a profit of Baht 126 million or profit that was two times greater than 2010.

In 2011, the lifestyle fashion and cosmetics distribution business experienced a 20% increase in sales. Gap, which we introduced to Thailand in early 2010, continued to expand. Our other fashion brands, including Esprit, Charles & Keith and Bossini achieved comparable growth rates between 10% and 42%. Charles and Keith achieved particularly strong growth as the market for ladies’ footwear and accessories continued to expand. We also continued to focus on free-standing branded stores whilst reducing our presence in department stores. This helped drive store productivity and brand recognition especially for Esprit. In 2011, we further refined our retail trading portfolio by selling our Laneige business. Through a joint venture, we also launched a website named thaisale.co.th to capture the growing online retail sales market in Thailand. Our members’ only sales site was launched to the general public in November 2011 and acquired more than 40,000 members within six weeks.


Minor International Public company limited

035

Our contract manufacturing business, NMT Limited, was severely affected by the floods in 2011. The floods forced us to close the factory on October 15 and some of NMT’s equipment was damaged. Although we are working through the impact of the floods with our insurance providers, our factory was forced to recognize a write-off of Baht 83 million. We expect the factory to return to full operating status by second quarter of 2012. Retail Points of Sale No. of outlet

Esprit Bossini Tumi Charles & Keith GAP     Total Fashion     Red Earth Bloom Laneige* Smashbox Total Cosmetics     Other (Zwilling J.A. Henckels)     Grand Total

2007

2008

2009

2010

2011

97 63 7 19 -  186   37 18 17 2 74   30   290

101 73 8 19 - 201   32 15 14 4 65   22   288

102 73 6 22 - 203   28 14 13 4 59   18   280

93 69 5 17 3 187

86 66 7 18 6 183

20 15 13 6 54

17 14 12 6 49

17

15

258

247

* During the fourth quarter of 2011, Minor Corporation Public Company Limited has entered into the agreement to sell its entire investment in Amore Pacific (Thailand) Limited (the distributor of ‘Laneige’).


036

2011 Annual Report

Our Journey to Sustainability

Being a good, socially responsible corporate citizen is an integral part of our values and this extends beyond ad hoc philanthropy. At Minor International, we strive for sustainability of our own business, to ensure the benefits to our stakeholders both in the short and long term; sustainability of our customers and partners, to be able to grow with us; and sustainability of communities around us, for a better society at large.

Balancing economic, social and environmental goals in the midst of competitive environment is the essence of

our sustainable growth, and aligning it to our corporate strategy ensures that our efforts positively impact everything around us. We believe four key factors - people, customers, partners, and environment - drive the sustainability of Minor International and our community.


Minor International Public company limited

037


038

2011 Annual Report

Driving People Development

One of our philosophies has long been that “people are the greatest assets” - not only to our company, but to their families and the communities surrounding them. People are the crucial factor that drives our business goals, supports national competitiveness and ultimately is the strength of our economy. “Development of Human Capital” is one area where we focus closely. We try to help our people develop business and practical skills and we reach out to develop the future generations of Thailand and the countries that are home to our businesses. In a service industry such as leisure and hospitality, a key success factor is the quality of people. We continue to develop our team by promoting high standards, operational excellence, ethical conduct, efficient evaluation systems and continuous improvement programs, while at the same time, encouraging entrepreneurial thinking. We invest in our people through series of training courses in relevant areas such as sales, marketing, accounting,

leadership, and English literacy, as well as softer skills such as grooming and personal hygiene. People development is not only limited to our own staff. Minor International has a Student Working Program for over 20 years. We hire students as part-time employees and provide them with opportunities to participate in programs such as Talent Development and Skill Training. These programs focus on developing the necessary skills in the food and service industries. The programs give both economic value and pride to students and provide them with opportunities to work with us full time in the future. We were the first company in Thailand to instigate this Part-Time Youth Employee System. Minor International is committed to improving education quality and enhancing career opportunities for children. We work in partnership with various government agencies such as the Ministry of Social Development and Human Security, the Ministry of Education, the National Council for Child and Youth Development, and the Office of the National Economic and Social Development Board in the development


Minor International Public company limited

of national strategies and policies with a focus on “children & youth development”. We have also initiated the curriculum co-development with Rajabhat University and several vocational schools to encourage Minor professionals to work with teachers and share knowledge and best practices. Minor professionals volunteer to teach classes and students are given an opportunity to earn class credits by working in one of our many restaurants, hotels or retail shops.

At the grassroots level, we continue to support

students in disadvantaged schools to develop basic

through a program called “Life Value, Life Style, and Life Skill.” We work hand in hand with teachers and communities and continuously support their long term education quality through various means such as improving school facilities, providing learning media such as English interactive books, computers and playground, and teaching them about health and hygiene. We are currently working closely with 5 schools - Baan Klang Dong School (Nakhon Ratchasima Province), Wat Bot Woradit School (Ang Thong Province), Baan Nong Kham School (Prachuap Khiri Khan Province), Chao Thai Mai School (Phang Nga Province), and

learning ability

039

Baan Huay Bong School (Uthai Thani Province). We will continue to support them and use our learning from these projects as models for our future school programs.

We also partner with the Raks Thai Foundation

on the “84 Schools for The King’s 84th Birthday” Project

where our Anantara hotels in Thailand raised funds in commemoration of the King’s 84 th Birthday. With the funds we raised, we are able to support children & teacher development programs in 9 schools across the country and create better lives for close to one thousand students. Our business units also run their own individual education programs. The Book Club Campaign, run by The Pizza Company to encourage students’ book reading habits, has attracted over 40,000 students from 200 schools this year. At the same time, Minor Corporation promotes English Literacy Campaign with Time Life Books to improve children’s ability to communicate in English. We work with schools throughout the country as volunteer teachers and help them campaign for book donations.


040

2011 Annual Report

Through Minor International and the Roy E. Heinecke Scholarship Foundation , we provide education scholarships to students from primary school to university levels. We encourage students to be both academically excellent and socially responsible. In 2011, a total of 442 students were granted scholarships. A majority of the students were nominated from schools in communities where we have business presence including the Klongtoey railway community (Bangkok), Thonburi, Chiang Rai, Chiang Mai, Pattaya, Hua Hin, Samui, and Phuket. Engaging in End-to-End Customer Experience

Customers’ experience with our products and services is fundamental to the company’s sustainability. At Minor, we strive to understand, engage, and educate our customers beyond the customers’ contact point. We are committed to ensure we deliver the best products to our customers in a socially responsible manner, whether it is in the form of product quality and safety or responsible media.

We are very focused on food safety in all of our food outlets, within the food and hotel groups alike. We make sure that our ingredients and products achieve high hygiene standard all the way from our suppliers, through logistics and delivery, until they reach our outlets and our customers. We conduct very stringent supplier selection and regular audits of them. All employees are well trained with high standard procedures and tools, and are monitored and audited both internally and by third party professionals. In addition, we promote food traceability to ensure that all ingredients can be traced back to their sources to ensure product safety throughout the value chain. We believe that educating our staff about food safety does not only result in best food quality for our customers, but is also instrumental in creating a hygiene awareness and habits for our employees and their families.

Minor International aims to engage in end-to-end customer experience. Beyond the normal customer interactions, we start to get involved in other aspects of customers’ experience with us. For example, Sizzler promotes the allergen awareness in food served at our


Minor International Public company limited

041

restaurants to increase our customers’ awareness and reduce food safety risk. Minor Food Group initiated a program to include the telephone number and email of our brands’ customer relations team at the bottom of receipts so customers can reach out to them when needed. We also make sure that we create responsible media when communicating to our customers without controversial or incorrect contents.

at international standards. For example, our dairy and cheese factories buy majority of milk from local farmers and at the same time provide them with access to milk production knowledge/experts in order to help improve quality of products. In addition, as many of our staff are from the local area, we were very much engaged in helping the community including supporting them during flood and school improvement projects.

Committing to Long-term & Sustainable

We support The Royal Projects in helping hill tribe communities develop organic vegetables and low chemical products to serve health-conscious customers in Sizzler’s restaurants and our hotels in the North.

Partnerships

One of our core values is “partnership”, and we strive to develop win-win relationships with our partners, whether they are our suppliers, joint venture partners, owners, principals, franchisees or third party service providers. Approximately 80% of our supplies are sourced from local producers, and where possible, we encourage sourcing from local communities where our business units are based. Our goal is to maximize the local sourcing of our supplies, and to continually develop our local suppliers to operate and produce products

Minor Hotel Group also supports the local cultures. Through the “Anantara Experience” concept, our hotel staff work with the local communities and invite guests to experience and learn more about the cultures around our properties’ locations. is critical to Minor International’s sustainability. As we grow, the number

Selecting the right partner


042

2011 Annual Report

of partners we work with also increases. We realize the importance of having partners with track record of good reputation and ethical conduct, professionalism and employees’ welfare which is up to our standard. We continue to develop and grow together with our partners and learn from each other’s strengths to create synergies.

up new strategies to conserve energy, reduce waste, save the wildlife and increase participation in the local communities. All Anantara resorts have effective recycling, energy-conservation and waste management programs. In 2011, thirteen Anantara hotels in Thailand and overseas were Green Globe Certified, with the aim of five more to be certified within the first half of 2012.

Managing Environmental Impacts

The Minor Group cares deeply about the community and the environment. We encourage our employees and customers to be concerned about environmental protection through a “rethink, reduce, reuse and recycle” life style. This year, we began reviewing environmental impacts in each business unit which will eventually tranlate into our environmental policies. We also continuously contribute to animal and wildlife conservation in ecosystems where we operate.

Our Golden Triangle Elephant Foundation in Chiang Rai is an ongoing project that offers sanctuary to elephants that were used by poor families to beg on the streets of Thailand’s major cities. We provide shelter not only to the elephants, but also to their mahouts and family. The elephants and mahouts became our hotel’s live-in employees and their families are given opportunities for children’s education and family’s additional income generation through cottage industry such as weaving products which are sold at the hotel’s gift shop.

Our Hotel Group has a number of on-going environmental preservation programs and is drawing

We continue to organize the annual King’s Cup Elephant Polo Tournament . All proceeds of the


Minor International Public company limited

tournament are used to support elephants’ welfare, sustenance, employment, mahout training, medical treatments, and other elephant-related projects. Our Mai Khao Marine Turtle Foundation in Phuket provides support for the protection of sea turtles and the environment in which they live. We support sea turtle research and education and a sea turtle hatchery close to our Phuket properties. By working closely with local communities, the foundation sponsors activities and events that increase the environmental awareness of tourists, government agencies and communities such as Mai Khao Turtle Mini Marathon, Mai Khao Beach and Reef Cleaning Day and annual Turtle Release Event.

043

Minor’s “Together With Love” campaign - our symbol for collaboration in corporate social responsibilities. This campaign promotes volunteerism and support for the people in need. In 2011 we have launched many activities under this campaign including various flood relief efforts, free water during flood crisis, quarterly blood donation, sewing bras for breast cancer patients, incorporation of CSR activities in company outings, and many more.

Fostering Social Responsible Mindset

Minor Founder’s Day , which occurs every June 4th, is our “volunteer day”. All staff are encouraged to spend a day supporting a charity of their own choice or join volunteer activities organized by Minor’s CSR Club or their home business unit.

Sustainability cannot be achieved without being socially responsible. Minor International promotes social responsibility and volunteer spirits among employees and stakeholders through our business operations and through various campaigns and activities such as:

Support to the Thai Red Cross - with the Thai Red Cross’s extended and professional network, we believe we can touch even more people by working in collaboration with them. Minor International has participated in many of their


044

2011 Annual Report

activities, including donation of blood, funds and products. This year, we were also one of the main sponsors of Craniofacial Surgery project of The Princess Sirindhorn Craniofacial Center, Chulalongkorn Hospital.

Contribution to the Community - In addition to activities aligned with our key sustainability drivers, Minor as a group and independently by individual business units also contribute in various forms to the communities where we operate. Examples of these are: MINT’s donation to SET for the Flood Restoration program; The Coffee Club being a major supporter of the Children’s Hospitals of Australia; and Four Seasons Bangkok’s Cancer Care Run to benefit the Queen Sirikit Center for Breast Cancer; and various other charity activities.

CSR Recognition in 2011

Performance and Recognition: This year, Minor International was recognized in the area of CSR by several organizations and national events:

AMCHAM

Corporate Social Responsibility

- awarded by the American Chamber of Commerce for meeting business objectives and social needs while creating economic benefit and social gain for all stakeholders.

Excellence Recognition for 2011

Green Globe Certifications for Anantara hotels demonstration of the standard and quality of environmental consideration and global warming concerns.

“Best Employer in Thailand 2011” in hospitality and restaurant category - awarded by AON Hewitt to Swensen’s (Thai) and Sizzler - reassurance of our philosophy and quality of Minor’s People Development.


Minor International Public Company Limited

financial statements


046

2011 Annual Report

Report of the Board of Directors’ Responsibilities for Financial Statements The Board of Directors of Minor International Public Company Limited is responsible for the financial statements of the Company and subsidiaries which have been prepared in accordance with generally accepted accounting standards in Thailand. The policies pursued are deemed appropriate and applied consistently with adequate disclosure of important information in the notes to the financial statements. The Board has appointed an Audit Committee comprising three independent members to provide effective oversight of finances and the internal control system to ensure that accounting records are accurate, complete and timely, to prevent fraud and materially irregular operations. The views of the Audit Committee are reported in the Committee’s report in this annual report. The Board is confident that the internal control system of Minor International Public Company Limited and subsidiaries presents the financial position, results, operations, and cash flow accurately.

William E. Heinecke

Chairman of the Board of Director


Minor International Public company limited

047

Report of the Audit Committee Composition of the Audit Committee

The Audit Committee of Minor International Public Company Limited is comprised of three independent directors. The Company’s Chief Financial Officer and Internal Audit Director, and the Corporate Secretary serve as ex-officio members. Audit Committee’s principal responsibilities

The Audit Committee is empowered by the Board of Directors to examine all matters relating to the financial status of the Company, and its internal and external audits. The Committee pursues and promotes good corporate governance by actively creating awareness and providing advice to management on risk management, appropriate internal control practices, and other related activities of the Company in compliance with the rules and regulations of the Stock Exchange of Thailand. The Audit Committee met independently with the management and the internal and external auditors of the Company, conducted reviews and evaluations of accounting policies, the procedures relative to the accounting policies, the internal control assessment, and the audit plan. The Audit Committee also verified and accepted the consolidated financial statements for every quarter-end and provided assessments and recommendations to the Board of Directors. Where weaknesses were identified in internal controls, corrective and preventive action plans were established to eliminate or reduce the associated risks. The Board of Directors following the review and recommendations of the Audit Committee approved the policy and reports for related party transactions. The Internal Audit Department serves to identify and verify business risks and control weaknesses within the Company by carrying out systematic audit activities across the Company and its subsidiaries. The reports on compliance with internal control practices and procedures were discussed with the relevant management teams to incorporate their agreed action plans and submitted to senior management and the Audit Committee. The Internal Audit function serves as a facilitator and change management agent to improve Company’s risk management awareness through audit projects, post-audit follow up, and implementation of a risk management self assessment system. The team also works closely with Human Resource Divisions to ensure that staff development programs include corporate culture and risk management training utilizing existing Code of Conduct guidelines. The Audit Committee’s principal activities during the year

In 2011, the Committee’s principal activities including the following matters: 1. Approved quarterly financial statement and reviewed full year financial statements, and provided assessments and recommendations to the Board of Directors. 2. Reviewed accomplishments of the Company with respect to the performance effectiveness especially performance of new project operations and highlighted major concerns of overseas subsidiaries. 3. Consideration of the Group’s IT project updates and related risks 4. Acknowledged the Company’s risk management profile, and the appropriateness of its mitigation plans.


048

2011 Annual Report

5. Reviewed investment updates, and helped formulate risk weighted evaluation criteria for future investments. 6. Approved contracts for co-sourcing internal audits in Australia, Singapore, Sri Lanka, and Tanzania. 7. Reviewed management’s plan for the transition to International Financial Reporting Standard (IFRS). This included the assurance that the transition plan demonstrated clear understanding of the changes, identified key conversion activities, the time table, the resources required, and training of all staff affected by the transition. The Company appointed KPMG to be the implementation consultant to assist with the IFRS transition process. The status of the IFRS transition plan was updated to the Audit Committee every quarter. 8. The minutes of the Audit Committee Meetings were sent to the Board of Directors for acknowledgement. Major issues were discussed in the Board of Director meetings. The Audit Committee provided the following opinions:

1. The Company’s financial reports are accurate, complete, and reliable. 2. The Company’s assets are appropriately safeguarded, proper accounting records are maintained, and resources are effectively and efficiently utilized. 3. The Company complied with the securities laws, the Exchange’s regulations, and other laws relating to the Company’s businesses. 4. PricewaterhouseCoopers ABAS, the Company’s auditor, is suitable and provided appropriate services. 5. The related transactions arising in 2011 were rational and contributed optimal benefits of the Company. 6. For the year 2011, the Audit Committee held five meetings; four meetings to review the Company’s consolidated financial statements that had been certified by the external auditor and one meeting to review internal audit plan. The attendance of such meetings by each committee member was as follows; Position

1. Mr. Kenneth L. White 2. Khunying Jada Wattanasiritham 3. Ms. Chantana Sukumanont

Chairman Member Member

Attendance/ Audit Committee Meeting 5/5 5/5 4/5

7. Audit Committee performed its duties in accordance with its Charter, approved by the Board of Directors Accordingly, the Audit Committee has recommended to the Board of Directors that Pricewaterhouse Coopers ABAS, be reappointed as the Company’s auditor for the financial year ending 31 December 2012. The re-appointment of the audit firm and acceptance of its fees will be subjected to the approval of the shareholders at the Annual General Meeting to be held on 2 April 2012.

Kenneth L. White

Chairman of the Audit Committee


Minor International Public company limited

049

Auditor’s Report To the Shareholders of Minor International Public Company Limited

I have audited the accompanying consolidated and Company statement of financial position as of 31 December 2011 and 2010, and the related consolidated and Company statements of income and statements of comprehensive income, changes in shareholders’ equity and cash flows for the years then ended of Minor International Public Company Limited and its subsidiaries, and of Minor International Public Company Limited, respectively. The Company’s management is responsible for the correctness and completeness of information in these financial statements. My responsibility is to express an opinion on these financial statements based on my audits. I conducted my audits in accordance with generally accepted auditing standards. Those standards require that I plan and perform an audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. I believe that my audits provide a reasonable basis for my opinion. In my opinion, the consolidated and Company financial statements referred to above present fairly, in all material respects, the consolidated and Company financial positions as at 31 December 2011 and 2010, and the consolidated and Company results of operations, and cash flows for the years then ended of Minor International Public Company Limited and its subsidiaries, and of Minor International Public Company Limited, respectively, in accordance with generally accepted accounting principles.

Anothai Leekitwattana

Certified Public Accountant (Thailand) No. 3442 PricewaterhouseCoopers ABAS Ltd. Bangkok 21 February 2012


050

2011 Annual Report

Statement of Financial Position Minor International Public Company Limited As at 31 December 2011 and 2010

Consolidated

2011 Notes Baht

2010 Restated Baht

Company 2011

2010

Baht

Baht

Assets Current assets

Cash and cash equivalents 7 1,145,782,127 1,156,280,782 160,384,206 171,519,212 Trade and other receivables 8 2,739,262,266 1,575,537,003 743,132,460 633,869,402 Inventories 9 1,465,953,495 949,984,942 6,420,370 5,375,717 Points for right-to-use in time sharing resort 21,722,282 119,423,721 - - Land and real estates project for sales 10 1,574,095,989 2,418,721,480 - - Other current assets 11 659,868,801 627,189,312 83,886,800 30,467,727 Total current assets 7,606,684,960 6,847,137,240 993,823,836 841,232,058 Non-current assets Long-term loans to related parties 14 507,373,802 384,728,390 14,833,186,192 13,068,542,277 Investments in subsidiaries, associates and interests in joint ventures 12 3,925,130,532 1,535,859,281 7,833,049,475 6,653,674,504 Other long-term investments 13 160,000,924 1,915,606,279 121,849 1,804,547,765 Land and projects under development 15 33,097,764 3,955,349,423 - - Investment properties 16 933,472,475 950,129,055 - - Property, plant and equipment 17 17,137,372,678 10,232,531,068 477,523,400 462,932,604 Intangible assets 18 7,566,047,473 4,298,766,931 11,691,572 9,883,594 Leasehold rights 19 1,840,833,908 1,847,758,206 4,360,956 4,983,973 Other non-current assets 20 1,155,189,820 830,906,358 47,055,236 59,404,186 Total non-current assets 33,258,519,376 25,951,634,991 23,206,988,680 22,063,968,903 Total assets 40,865,204,336 32,798,772,231 24,200,812,516 22,905,200,961

The notes to the consolidated and Company financial statements on pages 65 to 153 form an integral part of the financial statements.


Minor International Public company limited

Statement of Financial Position

051

(Continued)

Minor International Public Company Limited As at 31 December 2011 and 2010

Consolidated

2011 Notes Baht

2010 Restated Baht

Company 2011

2010

Baht

Baht

Liabilities and shareholders’ equity

Current liabilities

Bank overdrafts and short-term loans from financial institutions 21 1,097,347,519 576,809,741 580,000,000 - Trade and other payables 22 3,992,364,487 2,961,299,952 276,058,903 236,649,261 Short-term loans from related parties 14 - - 1,549,601,374 1,376,380,033 Current portion of liabilities under finance lease agreement 21 141,235,490 - - - Current portion of long-term borrowings 21 382,164,249 555,022,409 60,000,000 244,000,000 Current portion of debentures 21 1,840,000,000 1,000,000,000 1,840,000,000 1,000,000,000 Current portion of deferred income 42,673,862 27,503,779 - - Income tax payable 210,162,426 156,614,249 - - Other current liabilities 23 880,780,953 781,388,975 16,797,903 22,084,979 Total current liabilities 8,586,728,986 6,058,639,105 4,322,458,180 2,879,114,273 Non-current liabilities Liabilities under financial lease agreement 21 80,061,460 - - - Long-term borrowings 21 5,923,300,380 2,335,864,290 - 1,052,000,000 Debentures 21 10,360,000,000 9,900,000,000 10,360,000,000 9,900,000,000 Provision for employee benefits 24 151,386,706 117,336,321 11,537,689 18,007,894 Other non-current liabilities 25 829,219,738 630,886,974 2,387,347 6,330,925 Total non-current liabilities 17,343,968,284 12,984,087,585 10,373,925,036 10,976,338,819 Total liabilities 25,930,697,270 19,042,726,690 14,696,383,216 13,855,453,092

The notes to the consolidated and Company financial statements on pages 65 to 153 form an integral part of the financial statements.


052

2011 Annual Report

Statement of Financial Position

(Continued)

Minor International Public Company Limited As at 31 December 2011 and 2010

Consolidated

2011 Notes Baht

2010 Restated Baht

Company 2011

2010

Baht

Baht

Liabilities and shareholders’ equity

Shareholders’ equity Share capital 26 Authorised share capital 3,666,519,673 ordinary shares of Baht 1 each 3,666,519,673 3,677,988,773 3,666,519,673 3,677,988,773 Issued and paid-up share capital 3,275,224,580 ordinary shares of Baht 1 each 3,275,224,580 3,262,339,373 3,275,224,580 3,262,339,373 Share premium 26 Ordinary shares 3,215,325,916 3,133,793,954 3,189,673,540 3,108,141,578 Advance for shares subscription - 4,218,918 - 4,218,918 Expired warrants in a subsidiary 104,788,723 104,788,723 - - Discount on business combination under common control (755,412,590) (755,412,590) (587,397,515) (587,397,515) Unrealised gain on dilution of investment 4,992,405 4,992,405 - - Discount on additional investment in subsidiary 12 a) (32,750,744) - - - Retained earnings Appropriated - legal reserve 28 367,799,113 367,799,113 367,799,113 367,799,113 Unappropriated 8,360,372,348 5,970,642,877 3,249,675,289 1,840,818,166 Other components of equity 29 (172,988,573) 781,065,422 9,454,293 1,053,828,236 Equity attributable to owners of the parent 14,367,351,178 12,874,228,195 9,504,429,300 9,049,747,869 Non-controlling interests 567,155,888 881,817,346 - - Total shareholders’ equity 14,934,507,066 13,756,045,541 9,504,429,300 9,049,747,869 Total liabilities and shareholders’ equity 40,865,204,336 32,798,772,231 24,200,812,516 22,905,200,961 (Continued)

The notes to the consolidated and Company financial statements on pages 65 to 153 form an integral part of the financial statements.


Minor International Public company limited

053

Statement of Income Minor International Public Company Limited For the years ended 31 December 2011 and 2010

Consolidated

2011 Notes Baht

2010 Restated Baht

Company 2011

2010

Baht

Baht

14 Revenues from hotel and related services operations 8,134,806,546 4,321,852,872 446,866,374 412,478,281 Rental income from property business 423,343,817 388,391,716 - - Revenues from entertainment operations 148,063,066 119,914,381 148,063,066 119,914,381 Revenues from spa services 298,419,740 295,918,225 - - Sales of food and beverage 10,707,906,421 9,590,770,343 - - Sales of real estates 2,820,830,458 205,338,437 - - Sales from distribution and manufacturing 2,925,539,697 2,679,626,833 - - Revenues from management service 329,588,532 246,354,795 215,008,300 250,118,255 Franchise fee income 348,296,036 291,733,063 - - Dividends income 83,786,267 82,555,167 492,932,543 1,554,727,692 Other income 30 1,847,464,581 650,247,886 2,188,165,874 513,257,793 Total revenues 28,068,045,161 18,872,703,718 3,491,036,157 2,850,496,402 Expenses 14 Direct cost of hotel and related services operations 4,141,358,554 2,297,583,697 191,153,620 179,865,885 Direct cost of rental from property business 218,790,063 211,952,554 - - Direct cost of entertainment operations 39,440,139 33,284,103 77,159,862 66,452,014 Direct cost of providing spa services 183,584,968 176,684,951 - - Cost of sales of food and beverage 3,573,832,477 3,189,060,062 - - Cost of sales of real estates 1,332,394,229 149,545,557 - - Cost of sales from distribution and manufacturing 1,777,920,590 1,646,040,601 - - Selling expenses 9,501,027,824 7,602,534,929 354,610,013 328,006,476 Administrative expenses 3,342,751,331 1,721,216,267 352,622,270 261,781,663 Total expenses 24,111,100,175 17,027,902,721 975,545,765 836,106,038 Revenues

The notes to the consolidated and Company financial statements on pages 65 to 153 form an integral part of the financial statements.


054

2011 Annual Report

Statement of Income

(Continued)

Minor International Public Company Limited For the years ended 31 December 2011 and 2010

Consolidated

2011 Notes Baht

2010 Restated Baht

Company 2011

2010

Baht

Baht

Operating profit 3,956,944,986 1,844,800,997 2,515,490,392 2,014,390,364 Share of net profit of investments in associates and joint ventures 12 b) 263,814,915 216,542,775 - - Profit before finance costs and income tax expense 31 4,220,759,901 2,061,343,772 2,515,490,392 2,014,390,364 Finance costs (879,402,380) (458,074,996) (616,220,000) (497,345,167) Profit before income tax expense 3,341,357,521 1,603,268,776 1,899,270,392 1,517,045,197 Income tax expense 32 (414,526,997) (291,070,786) - - Profit for the year 2,926,830,524 1,312,197,990 1,899,270,392 1,517,045,197 Profit attributable to: Owners of the parent 2,880,142,740 1,236,458,233 1,899,270,392 1,517,045,197 Non-controlling interests 46,687,784 75,739,757 - - 2,926,830,524 1,312,197,990 1,899,270,392 1,517,045,197 Earnings per share 33 Basic earnings per share 0.8805 0.3798 0.5807 0.4659 Diluted earnings per share 0.8758 0.3762 0.5776 0.4616

The notes to the consolidated and Company financial statements on pages 65 to 153 form an integral part of the financial statements.


Minor International Public company limited

055

Statement of Comprehensive Income Minor International Public Company Limited For the years ended 31 December 2011 and 2010

Consolidated

2011 Baht

2010 Restated Baht

Company 2011

2010

Baht

Baht

Profit for the year 2,926,830,524 1,312,197,990 1,899,270,392 1,517,045,197 Other comprehensive income: Gain (loss) on remeasuring of available-for-sale investments 21,746,245 1,036,981,885 (2) 992,753,630 Less Transfer due to changing status of investment (1,053,812,318) - (1,053,812,318) - Exchange differences on translating financial statements 76,599,238 (144,340,273) - - Actuarial gains 2,613,337 - 9,438,377 - Other comprehensive income (expense) for the year, net of tax (952,853,498) 892,641,612 (1,044,373,943) 992,753,630 Total comprehensive income (expense) for the year 1,973,977,026 2,204,839,602 854,896,449 2,509,798,827 Total comprehensive income (expense) attributable to:

Owners of the parent Non-controlling interests

1,926,088,745 47,888,281 1,973,977,026

2,162,715,941 42,123,661 2,204,839,602

854,896,449 2,509,798,827 - - 854,896,449 2,509,798,827

The notes to the consolidated and Company financial statements on pages 65 to 153 form an integral part of the financial statements.


Attributable to owners of the parent

Consolidated (Baht) Other components of equity Other comprehensive income

5

-

-

-

-

-

-

-

-

(49,851,376)

-

-

-

-

(49,851,376)

-

(49,851,376)

The notes to the consolidated and Company financial statements on pages 65 to 153 form an integral part of the financial statements.

Changes in equity for the year Additional ordinary shares 26 12,885,207 81,531,962 (4,218,918) - - - - - - - - - - 90,198,251 - 90,198,251 Dividend paid 34 - - - - - - - - (490,413,269) - - - - (490,413,269) (12,382,315) (502,795,584) Decrease in non-controlling interests as a result of investment in subsidiary - - - - - - - - - - - - - - (350,167,424) (350,167,424) Discount on additional investment in subsidiary 12 a) - - - - - - (32,750,744) - - - - - - (32,750,744) - (32,750,744) Total comprehensive income (expense) for the year - - - - - - - - - 2,880,142,740 (1,032,066,073) 75,398,741 2,613,337 (954,053,995) 1,926,088,745 47,888,281 1,973,977,026 Ending balance 31 December 2011 3,275,224,580 3,215,325,916 - 104,788,723 (755,412,590) 4,992,405 (32,750,744) 367,799,113 8,360,372,348 88,219,036 (263,820,946) 2,613,337 (172,988,573) 14,367,351,178 567,155,888 14,934,507,066

Beginning balance 1 January 2011 - restated 3,262,339,373 3,133,793,954 4,218,918 104,788,723 (755,412,590) 4,992,405 - 367,799,113 5,970,642,877 1,120,285,109 (339,219,687) - 781,065,422 12,874,228,195 881,817,346 13,756,045,541

Retrospective adjustments

Beginning balance 1 January 2011 - as previously reported 3,262,339,373 3,133,793,954 4,218,918 104,788,723 (755,412,590) 4,992,405 - 367,799,113 6,020,494,253 1,120,285,109 (339,219,687) - 781,065,422 12,924,079,571 881,817,346 13,805,896,917

Discount on business Discount on Remeasuring Total Total Issued and Advance Expired combination Unrealised gain additional of available- other owners Non- Total paid-up Share for shares warrants in under common on dilution of investment in Legal Retained for-sale Translation Actuarial component of the controlling shareholders’ Notes share capital premium subscription a subsidiary control investments subsidiary reserve earnings investment adjustment gains of equity parent interests equity

Minor International Public Company Limited For the years ended 31 December 2011 and 2010

Statement of Changes in Shareholders’ Equity

056 2011 Annual Report


Attributable to owners of the parent

Consolidated (Baht) Other components of equity Other comprehensive income

(Continued)

902,216,026 12,054,242,580 - (45,209,415)

The notes to the consolidated and Company financial statements on pages 65 to 153 form an integral part of the financial statements.

Beginning balance 1 January 2010 - restated 3,246,415,792 3,065,856,272 231,030 104,788,723 (755,412,590) - 347,774,113 5,242,356,085 83,303,224 (228,495,510) (145,192,286) 11,106,817,139 902,216,026 12,009,033,165 Changes in equity for the year Additional ordinary shares 26 15,923,581 67,937,682 (231,030) - - - - - - - - 83,630,233 - 83,630,233 Advance for share subscription - - 4,218,918 - - - - - - - - 4,218,918 - 4,218,918 Legal reserve 28 - - - - - - 20,025,000 (20,025,000) - - - - - Dividend paid 34 - - - - - - - (488,146,441) - - - (488,146,441) (92,971,775) (581,118,216) Unrealised gain on dilution of investment - - - - - 4,992,405 - - - - - 4,992,405 2,458,595 7,451,000 Increase in non-controlling interests as a result of investment in subsidiary - - - - - - - - - - - - 27,990,839 27,990,839 Total comprehensive income (expense) for the year - - - - - - - 1,236,458,233 1,036,981,885 (110,724,177) 926,257,708 2,162,715,941 42,123,661 2,204,839,602 Ending balance 31 December 2010 3,262,339,373 3,133,793,954 4,218,918 104,788,723 (755,412,590) 4,992,405 367,799,113 5,970,642,877 1,120,285,109 (339,219,687) 781,065,422 12,874,228,195 881,817,346 13,756,045,541

Beginning balance 1 January 2010 - as previously reported 3,246,415,792 3,065,856,272 231,030 104,788,723 (755,412,590) - 347,774,113 5,287,565,500 83,303,224 (228,495,510) (145,192,286) 11,152,026,554 Retrospective adjustments 5 - - - - - - - (45,209,415) - - - (45,209,415)

Discount on business Remeasuring Total Total Issued and Advance Expired combination Unrealised gain of available- other owners Non- Total paid-up Share for shares warrants in under common on dilution of Legal Retained for-sale Translation component of the controlling shareholders’ Notes share capital premium subscription a subsidiary control investments reserve earnings investment adjustment of equity parent interests equity

Minor International Public Company Limited For the years ended 31 December 2011 and 2010

Statement of Changes in Shareholders’ Equity

Minor International Public company limited

057


Company (Baht)

3,108,141,578 81,531,962 - - 3,189,673,540

3,262,339,373

12,885,207 -

- 3,275,224,580

- -

(4,218,918) -

4,218,918

- (587,397,515)

- -

(587,397,515)

- 367,799,113

- -

367,799,113

The notes to the consolidated and Company financial statements on pages 65 to 153 form an integral part of the financial statements.

Beginning balance 1 January 2011 Changes in equity for the year Additional ordinary shares 26 Dividend paid 34 Total comprehensive income (expense) for the year Ending balance 31 December 2011 1,899,270,392 3,249,675,289

- (490,413,269)

1,840,818,166

Discount on Issued and Premium Advance business Retained paid-up on paid-up for shares combination under Notes share capital capital subscription common control Legal reserve earnings

Minor International Public Company Limited For the years ended 31 December 2011 and 2010

(1,053,812,320) 15,916

- -

1,053,828,236

- -

1,053,828,236

9,438,377 (1,044,373,943) 9,438,377 9,454,293

- -

-

854,896,449 9,504,429,300

90,198,251 (490,413,269)

9,049,747,869

Total shareholders’ equity

(Continued)

Other components of equity Other comprehensive income Remeasuring of available- Total other for-sale component investment Actuarial gains of equity

Statement of Changes in Shareholders’ Equity

058 2011 Annual Report


3,040,203,896 67,937,682 - - - - 3,108,141,578

3,246,415,792 15,923,581 - - - - 3,262,339,373

(231,030) 4,218,918 - - - 4,218,918

231,030 - - - - - (587,397,515)

(587,397,515) - - 20,025,000 - - 367,799,113

347,774,113

- - (20,025,000) (488,145,618) 1,517,045,197 1,840,818,166

831,943,587

- - - - 992,753,630 1,053,828,236

61,074,606

- - - - 992,753,630 1,053,828,236

61,074,606

83,630,233 4,218,918 - (488,145,618) 2,509,798,827 9,049,747,869

6,940,245,509

Total shareholders’ equity

(Continued)

Other components of equity Other comprehensive income Discount on Remeasuring business of available- Total other combination under Retained for-sale component common control Legal reserve earnings investment of equity

Company (Baht)

The notes to the consolidated and Company financial statements on pages 65 to 153 form an integral part of the financial statements.

Opening balance 1 January 2010 Changes in equity for the year Additional ordinary shares 26 Advance for shares subscription Legal reserve 28 Dividend paid 34 Total comprehensive income (expense) for the year Ending balance 31 December 2010

Issued and Premium Advance paid-up on paid-up for shares Notes share capital capital subscription

Minor International Public Company Limited For the years ended 31 December 2011 and 2010

Statement of Changes in Shareholders’ Equity

Minor International Public company limited

059


060

2011 Annual Report

Statements of Cash Flows Minor International Public Company Limited For the years ended 31 December 2011 and 2010

Consolidated

2011 Notes Baht

2010 Restated Baht

Company 2011

2010

Baht

Baht

Cash flows from operating activities

Profit before income tax 3,341,357,521 1,603,268,776 1,899,270,392 1,517,045,197 Adjustments for: Depreciation and amortisation 31 1,980,192,301 1,571,094,740 87,827,387 81,275,876 Amortisation of other assets 43,024,766 38,800,997 26,324,550 14,276,765 Amortisation of borrowing cost 4,981,684 - - - Provision for impairment of trade receivables (Reversal) 7,706,314 4,350,852 (187,901) (29,660) Realisation of deferred income (39,008,424) (47,489,361) - - Share of net profit of investments in associates and joint ventures 12 (263,814,915) (216,542,775) - - Interest expenses 879,402,380 458,074,996 616,220,000 497,345,167 Interest income 30 (42,739,709) (28,051,380) (653,836,566) (463,722,120) Dividends income (83,786,267) (82,555,167) (492,932,543) (1,554,727,692) Transalation adjustment for equity loan (68,214,698) 42,230,401 - - Unrealised loss on exchange rate 9,560,606 5,510,954 - - Gain on capital returned from subsidiary 30 - - (418,150,898) - Loss (gain) on sales of other long-term investment 312,500 (29,693,470) - - Gain from fair value adjustment of investment 30 (1,257,036,173) - (1,053,811,504) - Write-off, impairment and loss (gain) on disposals of property, plant and equipment 45,376,083 24,413,845 47,890 (113,104) Allowance for inventory obsolescence (Reversal) 137,400,095 (6,614,973) - - Provision for impairment and write-off of other assets (Reversal) 117,120,403 (16,120,292) 77,280 - Provision for employee benefits 24 25,966,426 19,221,326 3,284,612 3,068,348

The notes to the consolidated and Company financial statements on pages 65 to 153 form an integral part of the financial statements.


Minor International Public company limited

Statements of Cash Flows

061

(Continued)

Minor International Public Company Limited For the years ended 31 December 2011 and 2010

Consolidated

2011 Notes Baht

2010 Restated Baht

Company 2011

2010

Baht

Baht

Changes in working capital Trade and other receivables (596,444,087) 85,168,944 (35,700,865) (52,054,485) Inventories (564,647,717) (191,807,524) (1,044,653) (51,040) Points for right-to-use in time sharing resort 97,701,439 - - - Land and real estates project for sales 1,093,715,699 (21,158,892) - - Other current assets (38,749,578) (58,582,166) (2,799,898) 6,513,809 Trade and other payables 416,215,890 92,095,901 17,796,918 (6,753,101) Other current liabilities (112,926,349) 171,602,897 (5,287,076) 11,967,745 Deferred income 26,018,845 10,585,742 - - Other non-current liabilities 92,204,560 (15,982,141) (3,943,578) (2,988,302) Cash generated from operations 5,250,889,595 3,411,822,230 (16,846,453) 51,053,403 Interest paid (827,611,914) (448,116,034) (596,157,854) (482,323,350) Income tax paid (608,215,914) (357,312,504) (17,482,026) (16,489,442) Employee benefits paid 24 (1,658,120) (68,949,552) (316,440) (24,190,580) Net cash generated from (used in) operating activities 3,813,403,647 2,537,444,140 (630,802,773) (471,949,969)

The notes to the consolidated and Company financial statements on pages 65 to 153 form an integral part of the financial statements.


062

2011 Annual Report

Statements of Cash Flows

(Continued)

Minor International Public Company Limited For the years ended 31 December 2011 and 2010

Consolidated

2011 Notes Baht

2010 Restated Baht

Company 2011

2010

Baht

Baht

Cash flows from investing activities

Increase in loans to and amounts due from related parties (85,533,583) (127,514,857) (1,764,643,915) (4,247,684,075) (Increase) decrease in loan to other company (86,581,810) 644,920,374 - 644,920,374 Payments for additional investments in subsidiaries, associates and joint venture (918,665,032) (704,220,000) (346,736,371) (14,000,000) Net cash payment for acquisition of investment in subsidiary (2,520,549,496) (303,303,545) - - Cash received from capital returned from subsidiary - - 1,346,413,294 - Cash received from disposal of investment in subsidiary - - - 250,000 Cash received from decrease in share capital of subsidiary 12 a) - - 43,622,004 43,622,004 Interest received 28,723,524 79,298,477 653,836,566 512,975,924 Dividends received from subsidiaries, associates, related parties and other companies 197,984,293 156,818,223 407,035,108 1,554,109,961 Cash invested in other long-term investments 13 (27,797,214) (73,006,457) (97,898) (67,982,519) Cash received from sales of long-term investment 312,500 65,449,666 - - Payments for land and project under development (547,779,486) (3,209,115,290) - - Payments for investment properties (10,246,529) (1,102,560) - - Purchases of property, plant and equipment (2,319,348,116) (1,080,768,444) (116,452,251) (37,417,163) Proceeds from disposals of property, plant and equipment 98,543,461 54,599,074 46,075 113,551 Purchases of intangible assets (175,985,536) (121,677,100) (6,385,563) (3,462,817) Cash payment for other non-current assets (171,636,727) (98,681,277) (13,975,605) (15,640,439) Net cash receipts (payments) for investing activities (6,538,559,751) (4,718,303,716) 202,661,444 (1,630,195,199) The notes to the consolidated and Company financial statements on pages 65 to 153 form an integral part of the financial statements.


Minor International Public company limited

Statements of Cash Flows

063

(Continued)

Minor International Public Company Limited For the years ended 31 December 2011 and 2010

Consolidated

2011 Notes Baht

2010 Restated Baht

Company 2011

2010

Baht

Baht

Cash flows from financing activities

Increase (decrease) in short-term loans, amount due to and advances from related parties - (13,138,279) 173,221,341 143,327,245 Receipts from short-term loans 2,658,299,350 4,428,049 580,000,000 - Repayments of short-term loans (2,185,045,800) (73,886,488) - - Repayments of financial lease liabilities (132,919,134) - - - Receipts from long-term borrowings 21 5,273,868,884 859,341,952 - - Repayments of long-term borrowings 21 (3,831,820,641) (635,022,371) (1,236,000,000) (344,000,000) Receipts of debentures 21 2,300,000,000 4,000,000,000 2,300,000,000 4,000,000,000 Redemptions of debentures 21 (1,000,000,000) (1,275,000,000) (1,000,000,000) (1,275,000,000) Issue of additional ordinary shares 26 90,198,251 83,630,233 90,198,251 83,630,233 Cash received from increase in share capital of a subsidiary - 7,451,000 - - Advance for shares subscription - 4,218,918 - 4,218,918 Dividends paid 34 (502,795,584) (581,118,216) (490,413,269) (488,145,618) Net cash receipts from financing activities 2,669,785,326 2,380,904,798 417,006,323 2,124,030,778

The notes to the consolidated and Company financial statements on pages 65 to 153 form an integral part of the financial statements.


064

2011 Annual Report

Statements of Cash Flows

(Continued)

Minor International Public Company Limited For the years ended 31 December 2011 and 2010

Consolidated

2011 Notes Baht

Company

2010 Restated Baht

2011

2010

Baht

Baht

Net increase (decrease) in cash and cash equivalents (55,370,778) 200,045,222 (11,135,006) 21,885,610 Cash and cash equivalents at the beginning of the year 1,154,232,290 968,814,956 171,519,212 149,633,602 Gain (loss) on exchange rate 39,786,696 (14,627,888) - - Cash and cash equivalents at the end of the year 1,138,648,208 1,154,232,290 160,384,206 171,519,212 Cash and cash equivalents as at 31 December

Consolidated

Notes

2011 Baht

Cash and cash equivalents 7 Bank overdrafts 21

Company 2010 Baht

2011 Baht

1,145,782,127 1,156,280,782 (7,133,919) (2,048,492) 1,138,648,208 1,154,232,290

160,384,206 - 160,384,206

2010 Baht 171,519,212 - 171,519,212

Non-cash transaction Significant non-cash activities for the years ended 31 December 2011 and 2010 are as follows: Supplementary information for cash flows

Consolidated

2011 Baht

Company 2010 Baht

2011 Baht

2010 Baht

Acquisition of property, plant and equipment, and land held for future development and projects under development by payable 227,186,732 196,497,696 3,131,522 1,580,944 Account payable arisen from purchase of investment in a subsidiary 5,170,784 57,962,859 - - Account payable arisen from provision of investment 23,768,400 45,226,950 - The notes to the consolidated and Company financial statements on pages 65 to 153 form an integral part of the financial statements.


Minor International Public company limited

065

Notes to the Consolidated and Company Financial Statements Minor International Public Company Limited For the years ended 31 December 2011 and 2010

1. General information

Minor International Public Company Limited (“the Company”) is a public limited company incorporated and resident in Thailand. The addresses of the Company’s registered offices are as follows: Bangkok : Pattaya :

16th Floor, Berli Jucker House, 99 Soi Rubia, Sukhumvit 42, Prakanong, Klongtoey, Bangkok 10110 Thailand. 218/2-4 Moo 10 Beach Road, Nongprue, Banglamung, Chonburi, Thailand.

The Company is listed on the Stock Exchange of Thailand in October 1988. For reporting purposes, the Company and its subsidiaries are referred to as the Group. The Group engages in investment activities, hotel, restaurant operations, and distribution and manufacturing. The Group mainly operates in Thailand and also has operations in other countries such as Singapore, People’s Republic of China, Republic of Maldives, United Arab Emirates, Sri Lanka, and Australia, etc. These consolidated and Company f inancial statements were authorised for issue by the Board of Directors on 21 February 2012. 2. Accounting policies

The principal accounting policies adopted in the preparation of these consolidated and Company financial statements are set out below:

2.1 Basis for preparation

The consolidated and Company financial statements have been prepared in accordance with Thai Generally Accepted Accounting Principles under the Accounting Act B.E. 2543, being those Thai Accounting Standards issued under the Accounting Profession Act B.E. 2547, and the financial reporting requirements of the Securities and Exchange Commission under the Securities and Exchange Act. The consolidated and Company f inancial statements have been prepared under the cost convention except some investments which are carried at fair value as disclosed in the accounting policies below.


066

2011 Annual Report

The preparation of financial statements in conformity with Thai generally accepted accounting principles requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Group’s accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements are disclosed in Note 3. Comparative figures have been adjusted to conform with changes in presentation in the current year as mentioned in Note 5 - Change in accounting policies. An English version of the consolidated and Company financial statements have been prepared from the statutory financial statements that are in the Thai language. In the event of a conflict or a difference in interpretation between the two languages, the Thai language statutory financial statements shall prevail.

2.2 New accounting standards, new financial reporting standards, new interpretation and amendments

to accounting standards

a) New accounting standards, new financial reporting standards, new interpretation and amendments to accounting standards effective for the periods beginning on or after 1 January 2011 adopted by the Group, except TAS 19 Employee Benefits which has been early adopted since 2009.

TAS 1 (Revised 2009) TAS 2 (Revised 2009) TAS 7 (Revised 2009) TAS 8 (Revised 2009) TAS 10 (Revised 2009) TAS 11 (Revised 2009) TAS 16 (Revised 2009) TAS 17 (Revised 2009) TAS 18 (Revised 2009) TAS 19 TAS 23 (Revised 2009) TAS 24 (Revised 2009) TAS 26 TAS 27 (Revised 2009) TAS 28 (Revised 2009) TAS 29 TAS 31 (Revised 2009) TAS 33 (Revised 2009) TAS 34 (Revised 2009) TAS 36 (Revised 2009) TAS 37 (Revised 2009) TAS 38 (Revised 2009)

Presentation of Financial Statements Inventories Statement of Cash Flows Accounting Policies, Changes in Accounting Estimates and Errors Events after the Reporting Period Construction Contracts Property, Plant and Equipment Leases Revenue Employee Benefits Borrowing Costs Related Party Disclosures Accounting and Reporting by Retirement Benefit Plans Consolidated and Separate Financial Statements Investments in Associates Financial Reporting in Hyperinflationary Economies Interests in Joint Ventures Earnings per Share Interim Financial Reporting Impairment of Assets Provisions, Contingent Liabilities and Contingent Assets Intangible Assets


Minor International Public company limited

TAS 40 (Revised 2009) TFRS 2 TFRS 3 (Revised 2009) TFRS 5 (Revised 2009) TFRS 6 TFRIC 15 TSIC 31

067

Investment Property Share-based Payment Business Combinations Non-current Assets Held for Sale and Discontinued Operations Exploration for and Evaluation of Mineral Resources Agreements for the Construction of Real Estate Revenue - Barter Transactions Involving Advertising Services

The Company’s management has determined that the new accounting standards, new financial reporting standards, new interpretation and amendments to accounting standards will not significantly impact the financial statements being presented except as disclosed below. TAS 1 (Revised 2009): The revised standard will prohibit the presentation of items of income and expenses in the statement of changes in equity. Entities can choose whether to present one statement (the statement of comprehensive income) or two statements (the income statement and statement of comprehensive income). Where entities restate or reclassify comparative information, they will be required to present a restated statement of f inancial position as at the beginning comparative period in addition to the current requirement to present statement of financial position at the end of the current period and comparative period. However, for the financial statements which period beginning on or after 1 January 2011 and are the first period apply this standard, an entity can choose to present statement of financial position only two statements without the statement of f inancial position as at the beginning comparative period. The Group has adopt TAS 1 (Revised 2009) from 1 January 2011. The Group choose to present two statements (the statement of income and statement of comprehensive income). TAS 16 (Revised 2009): The revised standard requires the entity to include in cost of PPE, an initial estimate of the costs of dismantling and removing the item and restoring the site on which it is located, when the entity has obligation to do. An entity requires that an item of property, plant and equipment with a cost that is significant in relation to the total cost of the item shall be depreciated separately. The revised standard also requires an entity to review useful life, residual value and depreciation method at least at each financial year-end. The Group has adopted this standard from 1 January 2011 with an adjustment to retained earnings amounting to Baht 50 million (Note 5). TAS 24 (Revised 2009): The def inition of related party has been expanded include parties with joint control over the entity, joint venture in which the entity is a venturer and post-employment benefit plan for the benefit of employees of an entity. The Group has adopt the revised standard from 1 January 2011 which may impact only to the disclosure of related parties information in the notes to financial statements.


068

2011 Annual Report

TAS 40 (Revised 2009): The standard has specif ic presentation and measurement requirements for investment property. The Group has to present an investment property separately in the statement of financial position. The entity can choose to measure it either cost model or fair value model. Under fair value model, any changes in fair value are recognised in profit or loss. The Group has adopted the standard from 1 January 2011. The Group has applied cost model for measurement and reclassified them from land and projects under development and property, plant and equipment category (Note 5). TFRS 3 (Revised 2009): The revised standard continues to apply the acquisition method to business combinations, with some significant changes. For example, all payments to purchase a business are to be recorded at fair value at the acquisition date, with contingent payments classified as debt subsequently re-measured through profit or loss. There is a choice on an acquisition-by-acquisition basis to measure the non-controlling interest in the acquiree either at fair value or at the non-controlling interest’s proportionate share of the acquiree’s net assets. All acquisition-related costs should be expensed. The Group has adopted the revised standard prospectively to all business combination from 1 January 2011. b) New accounting standards, new interpretation and amendment to accounting standards that are not yet effective and have not been early adopted by the group Effective for the periods beginning on or after 1 January 2013

TAS 12 TAS 20 (Revised 2009) TAS 21 (Revised 2009) TSIC 10 TSIC 21 TSIC 25

Income taxes Accounting for Government Grants and Disclosure of Government Assistance The Effects of Changes in Foreign Exchange Rates Government Assistance - No Specific Relation to Operating Activities Income Taxes - Recovery of Revalued Non-Depreciable Assets Income Taxes - Changes in the Tax Status of an Entity or its Shareholders

TAS 12: This deals with taxes on income, comprising current tax and deferred tax. Current tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities, using tax rates and tax law that have been enacted or substantively enacted by the end of the reporting period. Deferred taxes are measured by based on the temporary difference between the tax base of an asset or liability and its carrying amount in the financial statements and using the tax rates that are expected to apply to the period when the asset is realised or the liability is settled, based on tax rates and tax law that have been enacted or substantively enacted by the end of the reporting period. The Group will apply this standard from 1 January 2013 retrospectively with an expectation to incur of deferred tax account and changes in retained earnings and income tax expense. The management is currently assessing the impact of applying this standard.


Minor International Public company limited

069

2.3 Investments in subsidiaries, associates and interests in joint ventures

(1) Subsidiaries Subsidiaries are all entities over which the Group has the power to govern the financial and operating policies generally accompanying a shareholding of more than one half of the voting rights. The existence and effect of potential voting rights that are currently exercisable or convertible, including potential voting rights held by another entity, are considered when assessing whether the Group controls another entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are de-consolidated from the date that control ceases. The Group uses the acquisition method of accounting to account for business combinations. The consideration transferred for the acquisition of a subsidiary is the fair values of the assets transferred, the equity interests issued by the group and liabilities incurred or assumed at the date of exchange, plus costs directly attributable to the acquisition. The consideration transferred includes the fair value of any asset or liability resulting from a contingent consideration arrangement. Acquisition-related costs are expensed as incurred. Identif iable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. On an acquisition by-acquisition basis, the group recognises any non-controlling interest in the acquiree either at fair value or at the non-controlling interest’s proportionate share of the acquiree’s net assets. Investments in subsidiaries are accounted for at cost less impairment. Cost is adjusted to reflect changes in consideration arising from contingent consideration amendments. Cost also includes direct attributable costs of investment. The excess of the consideration transferred, the amount of any non-controlling interest in the acquiree and the acquisition-date fair value of any previous equity interest in the acquiree over the fair value of the group’s share of the identifiable net assets acquired is recorded as goodwill. If this is less than the fair value of the net assets of the subsidiary acquired in the case of a bargain purchase, the difference is recognised directly in profit of loss. Intercompany transactions, balances and unrealised gains or losses on transactions between Group companies are eliminated. Unrealised losses are also eliminated. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group. (2) Transactions and non-controlling interests The Group treats transactions with non-controlling interests as transactions with equity owners of the Group. For purchases from non-controlling interests, the difference between any consideration paid and the relevant share acquired of the carrying value of net assets of the subsidiary is recorded in equity. Gains or losses on disposals to non-controlling interests are also recorded in equity.


070

2011 Annual Report

When the Group ceases to have control or significant influence, any retained interest in the entity is re-measured to its fair value, with the change in carrying amount recognised in profit or loss. The fair value is the initial carrying amount for the purposes of subsequently accounting for the retained interest as an associate, joint venture or financial asset. In addition, any amounts previously recognised in other comprehensive income in respect of that entity are accounted for as if the Group had directly disposed of the related assets or liabilities. If the ownership interest in an associate is reduced but significant influence is retained, only a proportionate share of the amounts previously recognised in other comprehensive income are reclassified to profit or loss where appropriate. (3) Investments in associates and joint venture Associates are all entities over which the Group has significant influence but not control, generally accompanying a shareholding of between 20% and 50% of the voting rights. Joint venture is an entity which the Group has interest in jointly control. In the consolidated financial statement, investments in associates and joint venture are accounted for using the equity method of accounting and are initially recognised at cost. The Group’s investment in associates and joint venture includes goodwill identif ied on acquisition, net of any accumulated impairment loss. The Group’s share of its associates’ post-acquisition profits or losses is recognised in the profit or loss, and its share of post-acquisition movements in other comprehensive income is recognised in other comprehensive income. The cumulative post-acquisition movements are adjusted against the carrying amount of the investment. When the Group’s share of losses in an associate and joint venture equals or exceeds its interest in the associate and joint venture, including any other unsecured receivables, the Group does not recognise further losses, unless it has incurred obligations or made payments on behalf of the associates and joint venture. Unrealised gains on transactions between the Group and its associates and joint venture are eliminated to the extent of the Group’s interest in the associates and joint venture. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. Accounting policies of associates and joint venture have been changed where necessary to ensure consistency with the policies adopted by the Group. Dilution gains and losses arising in investments in associates are recognised in the profit or loss. In the Company’s separate f inancial statements, investments in associates and joint venture are accounted for using the cost method.

A list of the Group’s principal associates and joint ventures is set out in Note 12 b) - 12c).


Minor International Public company limited

071

2.4 Foreign currency translation

Items included in the financial statements of each of the Group’s entities are measured using its local currency. The consolidated financial statements are presented in Thai Baht. Foreign currency transactions are translated into Thai Baht using the exchange rates prevailing at the date of the transaction. Monetary assets and liabilities denominated in foreign currency are translated to Thai Baht at the exchange rate prevailing at the statement of financial position date. Gains and losses resulting from the settlement of foreign currency transactions and from the translation of monetary assets and liabilities denominated in foreign currencies, are recognised in the profit and loss. The statements of comprehensive income and cash flows of foreign entities are translated into the Group’s reporting currency at the weighted average exchange rates for the year and statement of financial position are translated at the exchange rates ruling on the end of reporting period. Currency translation differences arising from the retranslation of the net investment in foreign entities are taken to other component of shareholders’ equity. On disposal of a foreign entity, accumulated exchange differences are recognised in the statement of comprehensive income as part of the gain or loss on sale.

2.5 Segment reporting

Segment information is presented by business segments and geographical areas of the Group’s operations.

2.6 Cash and cash equivalents

In the consolidated and Company statement of cash flows, cash and cash equivalents include cash on hand, deposits held at call with banks, other short-term highly liquid investments with maturities of three months or less and bank overdrafts. In the consolidated and Company statement of financial position, bank overdrafts are shown within borrowings in current liabilities.

2.7 Trade accounts receivable

Trade accounts receivable are carried at the original invoice amount and subsequently measured at the remaining amount less any allowance for doubtful receivables based on a review of all outstanding amounts at the year end. The amount of the allowance is the difference between the carrying amount of the receivable and the amount expected to be collectible. Bad debts are written-off during the year in which they are identif ied and recognised in prof it or loss within administrative expenses.


072

2011 Annual Report

2.8 Inventories Inventories are stated at the lower of cost and net realisable value. Cost is determined by the moving average method for food and beverage, f inished goods and raw materials for manufacturing and spa products and by first-in, first-out method for fashion and cosmetic products. The cost of purchase comprises both the purchase price and costs directly attributable to the acquisition of the inventory, such as import duties and transportation charge, less all attributable discounts, allowances or rebates. The cost of finished goods and work in progress comprises design costs, raw materials, direct labour, other direct costs and related production overheads (based on normal operating capacity). It excludes borrowing costs. Net realisable value is the estimate of the selling price in the ordinary course of business, less applicable variable selling expenses. Allowance is made, where necessary, for obsolete, slow-moving and defective inventories. 2.9 Points for right-to-use in time sharing resort The Group accounts for points for right-to-use in time sharing resort for sales at acquisition costs plus costs directly attributable to the acquisition of the points for right-to-use in time sharing resort. 2.10 Land and real estates project for sales Land and real estates project are stated at the lower of cost or net realisable value. The project cost consists of cost of land, development cost, construction cost, miscellaneous expenses of the project and interest expenses. Capitalisation of interest will be discontinued when the construction completes. 2.11 Other investments Investments other than investments in subsidiaries, associates and joint ventures are classified into the following two categories: available-for-sale and general investments. The classification in dependent on the purpose for which the investments were acquired. Management determines the appropriate classification of its investments at the time of the purchase and re-evaluates such designation on a regular basis. 1.

Investments intended to be held for an indefinite period of time, which may be sold in response to liquidity needs or changes in interest rates, are classified as available-for-sale; these are included in non-current assets unless management has expressed the intention of holding the investment for less than 12 months from the statement of financial position date or unless they will need to be sold to raise operating capital, in which case they are included in current assets.

2. Investments in non-marketable equity securities are classified as general investments.

All categories of investments are initially recognised at cost, which is equal to the fair value of consideration paid plus transaction cost. Available-for-sale investments are subsequently measured at fair value. The fair value of investments is based on quoted bid price at the close of business on the statement of financial position date by reference to the Stock Exchange of Thailand.


Minor International Public company limited

073

General investments are carried at cost less impairment.

A test for impairment is carried out when there is a factor indicating that such investment might be impaired. If the carrying value of the investment is higher than its recoverable amount, an impairment loss is charged to the income statement. On disposal of an investment, the difference between the net disposal proceeds and the carrying amount is charged or credited to the profit or loss. When disposing of part of the Group’s holding of a particular investment in equity securities, the carrying amount of the disposed part is determined by weighted average carrying amount of the total holding of the investment. 2.12 Investment properties Property that is held for long-term rental yields or for capital appreciation or both, and that is not occupied by the companies in the consolidated Group, is classified as investment property. Investment property also includes property that is being constructed or developed for future use as investment property. Investment property is measured initially at its cost, including related transaction costs and borrowing costs. Borrowing costs are incurred for the purpose of acquiring, constructing or producing a qualifying investment property are capitalised as part of its cost. Borrowing costs are capitalised while acquisition or construction is actively underway and cease once the asset is substantially complete, or suspended if the development of the asset is suspended. After initial recognition, investment property is carried at cost less any accumulated depreciation and any accumulated impairment losses. Land is not depreciated. Depreciation on other investment properties is calculated on the straight-line method to allocate their cost to their residual values over their estimated useful lives, as follows:

Land improvement lease period Buildings and building improvement lease period and 20 years

Subsequent expenditure is capitalised to the asset’s carrying amount only when it is probable that future economic benefits associated with the expenditure will flow to the Group and the cost of the item can be measured reliably. All other repairs and maintenance costs are expensed when incurred. When part of an investment property is replaced, the carrying amount of the replaced part is derecognised.


074

2011 Annual Report

2.13 Property, plant and equipment All property, plant and equipment are stated at historical cost less accumulated depreciation. Historical cost includes expenditure that is directly attributable to the acquisition of the items, including an initial estimate of the costs of dismantling and removing the item and restoring the site on which it is located, when the entity has the obligation to do so. Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognised. All other repairs and maintenance are charged to the income statement during the financial period in which they are incurred. Land is not depreciated. Depreciation on other assets is calculated on the straight-line method of depreciation to allocate their cost to their residual values over their estimated useful lives, as follows: Leasehold improvement Building and fitting equipment Building improvement Machinery and equipment Furniture, fixtures and office equipment Other equipment Motor vehicles

lease period, 5 years, 20 years and 30 years lease period, 5 years, 10 years, 20 years, 30 years and 40 years lease period and 10 years 5 - 15 years 4 years, 5 years, 10 years and 15 years 4 years, 5 years and 10 years 4 - 5 years

The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period. The asset’s carrying amount is written-down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount. Hotel operating equipment is stated at cost less accumulated depreciation. Additions are recorded as hotel operating equipment and expensed on issue or use. Operating equipment and kitchen supplies for restaurant operations are recorded at cost upon purchases and are depreciated on first issue or use. The depreciation is calculated on the straight-line method with the estimated useful life of 5 years. When new items are issued to replace the operating equipment, the replacement cost of operating equipment and kitchen supplies are recognised as expense when issued. When existing outlets are re-modernised, the related expenditures will be capitalised as buildings improvements or leasehold improvements and will be depreciated using the straight-line method over the shorter of the remaining lease term and the estimated useful life of 3 - 7 years.


Minor International Public company limited

075

Gains and losses on disposals are determined by comparing proceeds with carrying amounts and are recognised in profit or loss.

2.14 Intangible assets

Franchise development cost Costs incurred on development of franchises relating to the design of restaurants and the testing of new products are recognised as intangible assets to the extent that such expenditure is expected to generate future economic benefits. Other development expenditure is recognised as an expense as incurred. Development costs previously recognised as expenses are not recognised as assets in a subsequent period. Development costs that have been capitalised are amortised from the commencement of the commercial launch of the franchise on a straight-line method over the period of its expected benef it, generally over 3 - 20 years. Capitalised development cost is not revalued. Its carrying amount is reviewed annually for impairment where it is considered necessary. Initial franchise fees Expenditure on acquired patents, trademarks and licences relating to restaurant franchises is capitalised and amortised using the straight-line method over the related agreement periods, generally over 10 - 20 years. The intangible assets are not revalued. The carrying amount of intangible asset is reviewed annually and adjusted for impairment where it is considered necessary. Goodwill Goodwill represents the excess of the cost of an acquisition over the fair value of the Group’s share of the net identifiable assets of the acquired subsidiary, associates and joint venture undertaking at the date of acquisition. Goodwill on acquisitions of subsidiaries is reported in the consolidated statement of financial position. Goodwill on acquisitions of associates and joint venture is included in investments in associates and joint venture and is tested for impairment as part of the overall balance. Goodwill is tested annually for impairment and carried at cost less accumulated impairment losses. Impairment losses on goodwill are not reversed. Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold. Goodwill is allocated to cash-generating units for the purpose if impairment testing. The allocation is made to those cash-generating units or group of cash-generating units that are expected to benefit from the business combination in which the goodwill arose, identified according to operating segment. Computer software Acquired computer software licences are capitalised on the basis of the costs incurred to acquire and bring to use the specific software. These costs are amortised over their estimated useful lives during 3 - 10 years.


076

2011 Annual Report

Costs associated with maintaining computer software programmes are recognised as an expense as incurred. Development costs that are directly attributable to the design and testing of identifiable and unique software products controlled by the Group are recognised as intangible assets when the following criteria are met: • it is technically feasible to complete the software product so that it will be available for use; • management intends to complete the software product and use or sell it; • there is an ability to use or sell the software product; • it can be demonstrated how the software product will generate probable future economic benefits; • adequate technical, financial and other resources to complete the development and to use or sell the software product are available; and • the expenditure attributable to the software product during its development can be reliably measured. Directly attributable costs that are capitalised as part of the software product include the software development employee costs and an appropriate portion of relevant overheads. Other development expenditures that do not meet these criteria are recognised as an expense as incurred. Development costs previously recognised as an expense are not recognised as an asset in a subsequent period. Computer software development costs are recognised as assets are amortised over their useful lives, which does not exceed 3 - 10 years. Management letting rights Management letting rights (“MLRs”) are recognised at cost less any accumulated amortisation and any accumulated impairment losses. The cost of the rights is amortised over the life of the building with which it is associated not less than 40 years. MLRs are not revalued in the accounts as they are not traded in an active market. The amortisation period and amortisation method are reviewed at each balance sheet date. Intellectual property Intellectual property is measured at purchased cost and represents ownership rights of the systems used by the Group to efficiently manage and operate its MLRs portfolio. Intellectual property is tested for impairment annually or more frequently if events or changes in circumstances indicate that the carrying value may be impaired. Impairment is measured by assessing the recoverable amount of the cash generating unit to which the intellectual property relates and where the recoverable amount of the cash generating unit is less than the carrying amount, an impairment loss is recognised. Such losses are not subsequently reversed. Intellectual property is considered to have an indef inite life and is therefore not subject to amortisation.


Minor International Public company limited

077

2.15 Leasehold right Leasehold right is capitalised and amortised using the straight-line method over the lease period. Leasehold right is not re-valued. The carrying amount of leasehold right is reviewed annually for impairment where it is considered necessary. 2.16 Impairment of assets Assets that have an indefinite useful life, for example goodwill, are not subject to amortisation and are tested annually for impairment. Assets that are subject to amortisation are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the carrying amount of the assets exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest level for which there are separately identif iable cash flows. Non-financial assets other than goodwill that suffered an impairment are reviewed for possible reversal of the impairment at each reporting date.

2.17 Long-term leases

Where the Group company is the lessee Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases (net of any incentives received from the lessor) are charged to profit or loss on a straight-line basis over the period of the lease. The Group leases certain property, plant and equipment. Leases of property, plant and equipment where the Group has substantially transfer all the risks and rewards of ownership are classified as finance leases. Finance leases are capitalised at the inception of the lease at the present value of the leased property and the present value of the minimum lease payments. Each lease payment is allocated between the liability and finance charges so as to achieve a constant rate on the finance balance outstanding. The corresponding rental obligations, net of finance charges, are included in other long-term payables. The interest element of the finance cost is charged to profit and loss over the lease period so as to achieve a constant periodic rate of interest on the remaining balance of the liability for each period. The property, plant and equipment acquired under finance leases is depreciated over the shorter period of the useful life of the asset and the lease term. Where the Group company is the lessor When assets are leased out under a finance lease, the present value of the lease payments is recognised as a receivable. The difference between the gross receivable and the present value of the receivable is recognised as unearned finance income. Lease income is recognised over the term of the lease using the net investment method, which reflects a constant periodic rate of return. Initial direct costs are included in initial measurement of the finance lease receivable and reduce the amount of income recognised over the lease term.


078

2011 Annual Report

Assets leased out under operating leases are included in property, plant and equipment in the balance sheet. They are depreciated over their expected useful lives on a basis consistent with other similar property, plant and equipment owned by the Group. Rental income (net of any incentives given to lessees) is recognised on a straight-line basis over the lease term. 2.18 Borrowings Borrowings are recognised initially at the proceeds received net of transaction costs incurred. Borrowings are stated at amortised cost using the effective yield method. Any difference between proceeds (net of transaction costs) and the redemption valve is recognised in the statement of income over the period of the borrowings. Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least 12 months after the end of reporting date. 2.19 Provisions Provisions, which exclude the provisions relating to employee benefits, are recognised when the Group has a present legal or constructive obligation as a result of past events, if it is probable that an outflow of resources will be required to settle the obligation, and a reliable estimate of the amount can be made. Where the Group expects a provision to be reimbursed, the reimbursement is recognised as a separate asset but only when the reimbursement is virtually certain. 2.20 Employee benefits The Group has both defined benefit and defined contribution plans. A defined benefit plan is a pension plan that is not a defined contribution plan. Typically defined benefit plans define an amount of pension benefit that an employee will receive on retirement, usually dependent on one or more factors such as age, years of service and compensation. The liability recognised in the statement of financial position in respect of defined benefit pension plans is the present value of the defined benefit obligation at the end of the reporting period less the fair value of plan assets, together with adjustments for unrecognised past-service costs. The defined benefit obligation is calculated annually by independent actuaries using the projected unit credit method. The present value of the defined benefit obligation is determined by discounting the estimated future cash outflows using interest rates of market yield of government bonds that are denominated in the currency in which the benefits will be paid, and that have terms to maturity approximating to the terms of the related pension liability. Past-service costs are recognised immediately in income, unless the changes to the pension plan are conditional on the employees remaining in service for a specified period of time (the vesting period). In this case, the past-service costs are amortised on a straight-line basis over the vesting period. Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are charged or credited to equity in other comprehensive income in the period in which they arise.


Minor International Public company limited

079

A defined contribution plan, the Group operates a provident fund that is a defined contribution plan. The assets of which are held in a separate trust fund. The provident fund is funded by payments from employees and by the relevant Group companies. Contributions to the provident fund are charged to the statement of income in the year to which they relate. 2.21 Income taxes The Group does not recognise income taxes payable or receivable in future periods in respect of temporary differences arising from differences between the tax base of assets and liabilities and their carrying amounts in the financial statements. The principal temporary differences arise from depreciation on plant and equipment, provision for impairment of receivables, allowance for inventory obsolescence, provision for impairment loss, provision for employee benefits, tax losses carried forward and the difference between the fair values of the net assets acquired and their tax base. 2.22 Share capital Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds. Where any Group company purchases the Company’s equity share capital (treasury shares), the consideration paid including directly attributable incremental costs (net of income taxes) is deducted from equity attributable to the company’ s equity holders until the shares are cancelled or reissued. Where such shares are subsequently reissued, any consideration received, net of any directly attributable incremental transact costs and the related income tax effects, is included in equity attributable to the company’s equity holders.

2.23 Warrants

Warrants to subscribe for ordinary shares issued to existing shareholders Warrants are issued to existing shareholders to subscribe for ordinary shares. Proceeds from issuing warrants are shown net of related expenses under the caption of “Warrants” in shareholders’ equity when the warrants are issued. Warrants to subscribe for ordinary shares by the directors and employees of the Company and/or its subsidiaries Certain employees and executive management of the Group are rewarded through entitlement to receive warrants to subscribe for ordinary shares. When such warrants are granted, no compensation cost is recognised in the statement of income. When the warrants are exercised the proceeds received net of any transaction costs are credited to share capital. 2.24 Revenue recognition Revenue from hotel operations, mainly consisting of room sales, food and beverage sales and revenue from auxiliary activities, is recognised when the service is rendered.


080

2011 Annual Report

Revenue from accommodation rentals is recognised when the rental period is commenced at which time it is brought to account over the rental period on a straight line basis. The f ixed portion of management rights revenue is recognised on a pro rata basis over the course of the management rights agreement. The variable portion of income arising from management rights is recognised as it is earned through either the sale of goods as they are supplied or through the provision of services as they are performed. Revenues from sales of foods and beverages are recognised upon delivery and services rendered, and presented net of sales taxes and discounts. Rental income from property business is recognised as revenue at the amount as specified under the related lease agreements. Rental received in advance is recognised as revenue evenly over the period of the lease.

Revenue from entertainment operations is recognised as revenue when the show is presented.

Revenues from spa services are recognised upon delivery and services rendered are presented net of sales taxes and discounts. Revenue from sales of real estate under finance lease contracts and sales of furniture and fixtures are recognised when significant risks and rewards of ownership of the goods are transferred to the buyer. Revenues from distribution and manufacturing are recognised as revenue when the goods are delivered to customers. Sales of goods to department stores are recognised as revenue only when the goods are sold to end customers. All revenues are shown net of sales taxes and discounts.

Revenue from management service is recognised as revenue when the service is rendered.

Revenue from sales of right-to-use of time sharing resort is recognised when the Group completely transfers significant risks and rewards of ownership of such right to the buyers and the construction of the resort is completed and ready for use. The Group will not recognise revenue from sales of right-to-use if the resort is not ready for use. Other revenue earned by the Group is recognised on the following bases: • on an accrual basis in accordance with the substance of • Royalty and franchise fee the relevant agreements. • Interest and commission income • as it accrues unless collectibility is in doubt. • when the shareholder’s right to receive payment is • Dividend income established.


Minor International Public company limited

081

2.25 Dividend distribution

Annual dividends are recorded in the consolidated and Company financial statements in the period in which they are approved by the shareholders meetings of the Company and subsidiaries. Interim dividends are recorded in consolidated and Company financial statements in the period in which they are approved by the board of directors meetings of the Company and subsidiaries. 3. Critical accounting estimates and judgments

Estimates and judgments are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. 3.1 Impairment of receivable The Group maintains an allowance for doubtful accounts to reflect impairment of trade receivables relating to estimated losses resulting from the inability of customers to make required payments. The allowance for doubtful accounts is significantly impacted by the Group’s assessment of future cash f lows, such assessment being based on consideration of historical collection experience, known and identified instances of default and consideration of market trends. 3.2 Impairment of goodwill and investments in subsidiaries The Group tests annually whether goodwill has suffered any impairment in accordance with the accounting policy stated in Note 2.14, including investments in subsidiaries. The recoverable amounts of cash-generating units have been determined based on value-in-use calculations. These calculations require the use of estimates by management. 3.3 Plant and equipment and intangible assets Management determines the estimated useful lives for the Group’s plant and equipment and intangible assets. Management will revise the depreciation charge where useful lives are different to previously estimated, or it will write off or write down technically obsolete or assets that have been abandoned or sold. 3.4 Provision for employee benefits The present value of the provision for employee benefits depends on a number of factors that are determined on an actuarial basis using a number of assumptions. The assumptions used in determining the net cost (income) for pensions include the discount rate. Any changes in these assumptions will impact the carrying amount of pension obligations. The Group determines the appropriate discount rate at the end of each year. This is the interest rate that should be used to determine the present value of estimated future cash outflows expected to be required to settle the employee benefits obligations. In determining the appropriate discount rate, the Group considers the interest rate of government bond that is denominated in the currency in which the benefits will be paid, and that have terms to maturity approximating the terms at the related employee benefits liability.


082

2011 Annual Report

Other key assumptions for the provision for employee benefits are based in part on current market conditions. 4. Risk management

4.1 Financial risk management The Group’s business activities maybe expose to a variety of financial risks including currency risk and interest rate risk. The Group’s overall risk management programme focuses on minimising potential adverse effects on the f inancial performance of the Group. The Group uses derivative financial instruments such as cross currency swap contracts, forward foreign exchange contracts and interest rate swap contracts to hedge certain exposures. Financial risk management for the Group is carried out by a central group treasury department. The central group treasury department identif ies, evaluates and hedges f inancial risks in close co-operation with the Group’s operating units. The Group follows written principles for overall risk management, as well as written policies covering specific areas, such as foreign exchange risk, interest rate risk, use of derivative financial instruments. The group does not have policy to use financial instruments for speculative or trading purposes 4.1.1 Cross currency swap contracts Cross currency swap contracts are recognised at the inception date. In cross currency swap contracts, the Group agrees with a counterparty to exchange their respective currency and interest rate positions between an agreed pair of currencies. An exchange of principal in the different currencies occurs at the inception of the cross currency swap contracts at a predetermined exchange rate, with an equal but opposite exchange of principal during interim periods and at the maturity of the contracts. The cross currency receivable/payable under these contracts is translated at the period-end exchange rate and the unrealised gains or losses are recognised in the statement of income. Each party also pays and receives interest on a predetermined amount of principal in different currencies over the contract periods. Any differential to be paid or received on the cross currency swap contracts is recognised as a component of interest income or expenses over the period of the contracts. 4.1.2 Forward foreign exchange contracts Foreign exchange forward contracts are recognised at the inception date. Forward foreign exchange contracts protect the Group from movements in exchange rates by establishing the rate at which a foreign currency asset will be realised or a foreign currency liability settled. Any increase or decrease in the amount required to realise the asset or settle the liability is offset by a corresponding movement in the value of the foreign exchange forward contract. The gains and losses on the derivative instruments are offset for f inancial reporting purposes. The Group do not oblige to pay any fee upon entering forward foreign exchange contract.


Minor International Public company limited

083

4.1.3 Interest rate swap contracts Interest rate swap contracts protect the Group from movements in interest rates. Any differential to be paid or received on an interest rate swap agreement is recognised as a component of interest expense over the period of the agreement. 4.2 Capital risk management The Group’s objectives are to maximize shareholder wealth while maintaining an appropriate capital structure and cost of capital. In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt. 4.3 The seasonality of the tourism industry risk management Hotel business has unpredictable and uncontrollable risks on tourism industry such as political situation, terrorism, epidemic concern, natural disaster including unrest situation in the country. The Group has strategy in coping with seasonality of tourism industry by the geographical diversification of its hotels throughout the country, the policy in optimising revenues between the hotel room and hotel food and beverages, the policy to increase number of domestic customers and expand foreign customer base to cover more countries. Moreover, the Group has a strategy to expand the food business to reduce the risk of seasonality of hotel business which is generally more certainty and less seasonality than hotel business. 5. Changes in accounting policies

5.1 Property, plant and equipment TAS 16 (Revised 2009) requires the entity to include in cost of property, plant and equipment an initial estimate of the costs of dismantling and removing the items and restoring the site on which it is located, when the entity has the obligation to do so. This accounting standard is effective since 1 January 2011. The Group has adopted this accounting standard and has accounted for the adoption retrospectively in accordance with the accounting standard. The comparative financial statements have been restated accordingly. The effect of the adoption on the financial statements for the year ended 31 December 2010 are summarised as follows:


084

2011 Annual Report

Consolidated Baht

Statement of financial position as at 31 December 2010 Increase in property, plant and equipment, net 12,603,683 Increase in other non-current liabilities 62,455,059 Decrease in retained earnings at 1 January 2010 (45,209,415) Decrease in retained earnings at 1 January 2011 (49,851,376) Income statement for the year ended 31 December 2010 Increase in depreciation expenses 4,641,961 (4,641,961) Decrease in profit for the year Decrease in basic earnings per share (0.0014) Decrease in diluted earnings per share (0.0014)

5.2 Investment properties

The Group has adopted accounting standard regarding investment property since 1 January 2011 and has accounted for the adoption retrospectively in accordance with the accounting standard. The comparative financial statements have been restated accordingly. The effect of the adoption on the financial statements for the year ended 31 December 2010 are summarised as follows:

Consolidated Baht Statement of financial position as at 31 December 2010 Increase in investment properties, net 950,129,056 Decrease in land and projects under development (331,280,644) Decrease in property, plant and equipment, net (618,848,412)


6.1 Financial information by business segments

Project under development Property, plant and equipment Other assets Total assets - 142 29 171

13,632 7,074 22 14 11,125 7,342 1,272 1,266 24,757 18,188 1,294 1,280

-

-

- 3,772 105 5 110

- 26 343 369

-

-

-

33

17

-

156 772 960

32

127 123 250

-

-

-

246 26,137 18,140 760 1,554 2,133 (760) (1,554) (2,133) 246 26,137 18,140

-

-

-

134

33 3,955

Investing in other companies Eliminated Total 2011 2010 2011 2010 2011 2010

1,426 1,006 15,976 11,230 (1,096) (760) (1,107) (794) 330 246 14,869 10,436

330 1,096 (1,096) 330

147 21 8 80 75 56 378 17,137 10,233 325 6,581 2,892 34,015 25,136 (40,275) (28,781) 23,695 18,611 472 6,602 2,900 34,095 25,211 (40,219) (28,269) 40,865 32,799

-

Food and Real beverage estates Management for sales for sales Distribution Manufacturing operations 2011 2010 2011 2010 2011 2010 2011 2010 2011 2010

32 2,371 2,244 424 - 236 297 6,323 5,949 3,204 3,408 955 329 8,694 8,193 3,661 3,425 1,191

-

Hotel and Property related Services rental Entertainment Spa operations business operations Services 2011 2010 2011 2010 2011 2010 2011 2010

As at 31 December (Baht Million)

External 8,135 4,323 423 388 148 120 298 296 11,056 9,883 2,821 205 1,902 1,592 1,024 1,087 Related parties 47 42 97 91 - - 5 3 - - 309 1,237 - - - - Eliminated (47) (42) (97) (91) - - (5) (3) - - (309) (1,237) - - - - Net revenues 8,135 4,323 423 388 148 120 298 296 11,056 9,883 2,821 205 1,902 1,592 1,024 1,087 Segment results 4,021 2,048 286 253 71 53 81 86 7,482 6,693 1,462 56 1,059 930 88 105 Eliminated (27) (24) (82) (77) 38 34 33 33 - - 27 - - - - - Net segment results 3,994 2,024 204 176 109 87 114 119 7,482 6,693 1,489 56 1,059 930 88 105

Hotel and Property Food and Real related Services rental Entertainment Spa beverage estates Management Total operations business operations Services operations for sales Distribution Manufacturing operations 2011 2010 2011 2010 2011 2010 2011 2010 2011 2010 2011 2010 2011 2010 2011 2010 2011 2010 2011 2010

For the years ended 31 December (Baht Million)

The Group and the Company operate in several business segments. Financial information by segment for the consolidated financial statements is as follows:

6. Segment information

Minor International Public company limited

085


086

2011 Annual Report

6.2 Financial information by geographical segments The Group’s business segments are managed on a worldwide basis and, they operate in main geographical areas as follows: Thailand is the home country of the parent company which is also the main operating. The areas of operation are principally hotel operations, entertainment operations, food and beverage operations, real estates for sales, distribution, manufacturing, property rental business, spa services and management operations.

Singapore - The Group operates food and beverage operations.

Australia - The Group operates hotel operations and food and beverage operations.

People’s Republic of China - The predominant activity is food and beverage operations and spa services.

Republic of Maldives - The main activities are hotel operations and spa.

Others - The main activities are hotel operations and spa. Other countries in which the Group operates are Sri Lanka, The United Arab Emirates, etc. Thailand Singapore Australia People’s Republic of China Republic of Maldives Sri Lanka The United Arab Emirates Others Eliminated

Revenues 2011 2010

Segment results 2011 2010

Total assets 2011 2010

Baht Million Baht Million Baht Million Baht Million Baht Million Baht Million

21,423 2,200 2,601 495 749 104 26 93 (1,554) 26,137

17,474 2,078 - 464 143 - 19 95 (2,133) 18,140

11,983 1,657 1,374 330 473 62 23 73 (1,106) 14,869

9,143 1,591 - 306 102 - 16 72 (794) 10,436

49,591 7,377 11,864 292 2,435 200 - 9,325 (40,219) 40,865

50,757 2,647 - 295 2,087 - - 5,282 (28,269) 32,799


Minor International Public company limited

087

7. Cash and cash equivalents

Consolidated

2011 Baht

2010 Baht

2011 Baht

2010 Baht

112,955,845 1,032,826,282 1,145,782,127

84,615,206 1,071,665,576 1,156,280,782

7,279,953 153,104,253 160,384,206

1,676,014 169,843,198 171,519,212

Cash on hand Cash at bank Total cash and cash equivalents

Company

The average effective interest rate of deposits with banks was 0.1% to 3.5% per annum (2010: 0.1% to 1.52% per annum). 8. Trade and other receivables

Consolidated

Company

2011 2010 2011 2010 Baht Baht Baht Baht Trade receivables - third parties, gross 1,519,019,464 1,005,716,583 18,801,728 17,466,336 Less Provision for impairment of trade receivables (69,417,902) (24,453,370) (260) (188,162) Trade receivables - third parties, net 1,449,601,562 981,263,213 18,801,468 17,278,174 Prepayments 380,583,358 151,257,998 7,995,801 5,973,296 Receivables from others 686,734,968 376,911,064 5,178,129 25,721,585 Receivables from related parties (Note 14) 222,342,378 66,104,728 711,157,062 584,896,347 Total trade and other receivables 2,739,262,266 1,575,537,003 743,132,460 633,869,402

Outstanding trade accounts receivable - third parties as at 31 December can be analysed as follows:

Consolidated

Company

2011 2010 2011 2010 Baht Baht Baht Baht Not yet due 1,144,065,583 796,258,483 16,254,018 15,262,237 Overdue Under 90 days 211,078,013 156,981,270 2,543,682 1,823,895 91 days to 180 days 88,921,121 25,940,284 2,726 85,514 Over 181 days 74,954,747 26,536,546 1,302 294,690 Trade receivables - third parties 1,519,019,464 1,005,716,583 18,801,728 17,466,336 Less Provision for impairment of trade receivables (69,417,902) (24,453,370) (260) (188,162) Trade receivables - third parties, net 1,449,601,562 981,263,213 18,801,468 17,278,174


088

2011 Annual Report

9. Inventories

Consolidated

2011 Baht Food and beverage 97,448,205 Finished goods (net with allowance) 350,588,967 Raw materials (net with allowance) 694,406,774 Work in process 16,005,115 Goods in transit 99,803,200 Supplies and others 207,701,234 Total inventories 1,465,953,495

2010 Baht 48,478,062 275,763,483 443,133,494 9,028,410 61,476,058 112,105,435 949,984,942

Company 2011 Baht 2,978,666 - - - - 3,441,704 6,420,370

2010 Baht 2,713,929 - - - - 2,661,788 5,375,717

The cost of inventories recognised as expense and included in cost of sales amounted to Baht 6,920 million (2010: Baht 6,015 million). During 2011, Baht 66 million was recorded to the income statement for allowance for obsolete and damaged inventories (2010: Reversal of Baht 7 million). 10. Land and real estates project for sales

Consolidated

2011 Baht

2010 Baht

Land 96,864,164 96,864,162 Land under lease agreement 455,214,701 440,771,216 Construction cost 1,828,114,044 1,787,853,481 685,010,777 203,958,825 Furniture and fixtures Interest capitalised 186,151,188 243,551,473 Others 38,530,650 176,866,511 3,289,885,524 2,949,865,668 Less Cost of sales - accumulated (1,715,789,535) (531,144,188) Land and real estates project for sales 1,574,095,989 2,418,721,480 As at 31 December 2011, the Group has commitment relating to the construction contracts of real estates project for sales of Baht 0.9 million (2010: Baht 12.3 million).


Minor International Public company limited

089

11. Other current assets

Prepaid income tax Advance for construction Current portion of loans to other companies Others Total other current assets

Consolidated

Company

2011 Baht 206,906,820 118,589,611

2010 Baht 171,860,158 363,521,793

2011 Baht 46,490,654 20,614,005

2010 Baht 16,485,489 -

13,139,237 321,233,133 659,868,801

- 91,807,361 627,189,312

- 16,782,141 83,886,800

- 13,982,238 30,467,727

12. Investments in subsidiaries, associates and interests in joint ventures

Consolidated

Company

2011 2010 2011 2010 Baht Baht Baht Baht Subsidiaries - - 5,658,569,135 6,629,390,044 Associates 3,905,609,849 1,521,253,975 2,150,195,880 - Interests in joint ventures 19,520,683 14,605,306 24,284,460 24,284,460 Total investments in subsidiaries, associates and interests in joint ventures 3,925,130,532 1,535,859,281 7,833,049,475 6,653,674,504

a) Investments in subsidiaries

At 1 January Additions Capital returned from subsidiary Disposals Decapitalisation in property fund At 31 December

Company 2011 Baht

2010 Baht

6,629,390,044 6,659,262,048 1,063,491 14,000,000 (928,262,396) - - (250,000) (43,622,004) (43,622,004) 5,658,569,135 6,629,390,044


090

2011 Annual Report

All investments in subsidiaries included in the consolidated financial statements are investments in ordinary shares of subsidiaries and units in property funds as follows: Company

Company - 31 December Nature of business

Country of incorporation

Investment portion (%) 2011 2010

Chao Phaya Resort Limited Hotel operation Thailand 81.24 81.24 and shopping mall Hua Hin Resort Limited Hotel operation Thailand 100 100 (1) 45.30(1) Maerim Terrace Resort Limited Hotel operation Thailand 45.30 Royal Garden Development Limited In liquidation Thailand 100 100 process Samui Resort and Spa Limited Hotel operation Thailand 100 100 Rajadamri Hotel Public Company Hotel operation Thailand 98.91 98.91 Limited MI Square Limited Hotel operation Thailand 100 100 Hua Hin Village Limited Hotel operation Thailand 100 100 Baan Boran Chiangrai Limited Hotel operation Thailand 100 100 Samui Village Limited Hotel operation Thailand 100 100 Coco Palm Hotel & Resort Limited Hotel operation Thailand 100 100 Coco Recreation Limited Hotel operation Thailand 100 100 Samui Beach Club Owner Limited Hotel operation & Thailand 100 100 rent of property The Minor Food Group Public Sales of food Thailand 99.72 99.72 Company Limited (“MFG”) and beverage Royal Garden Plaza Limited Shopping mall Thailand 100 100 (2) 51(2) MSpa International Limited (“MST”) Spa services Thailand 51 Samui Beach Residence Limited Sales of property Thailand 100 100 Coco Residence Limited Sales of property Thailand 100 100 Minor Hotel Group Limited Hotel management Thailand 100 100 RNS Holding Limited Management Thailand 100 100 Minor Global Solutions Limited Management Thailand 100 100 Chao Phaya Resort and Hotel operation Thailand 100 100 Residence Limited & sales of property 91.35(3) Minor Corporation Public Distribution Thailand 91.35(3) Company Limited (“MINOR”) RGR International Limited Management British Virgin 100 100 Islands R.G.E. (HKG) Limited Management Hong Kong 100 100 M&H Management Limited Management Republic of 100 100 Mauritius


Minor International Public company limited

Company Lodging Investment (Labuan) Limited Minor International (Labuan) Limited AVC Club Developer Limited AVC Vacation Club Limited Thai Project Property Fund Sub Thawee Property Fund Thai Assets Management Property Fund Phuket Beach Club Owner Limited

(1) (2) (3) (4)

091

Company - 31 December Nature of business

Country of incorporation

Investment portion (%) 2011 2010

Holding investment

Malaysia

100

100

Hotel operation

Malaysia

100

100

Sales of point for Republic of 100 100 right-to-use in Mauritius time sharing resort Sales of point for Republic of 100 100 right-to-use in Mauritius time sharing resort Property Thailand 99.90 99.90 investment 99.86(4) Property Thailand 99.86(4) investment Property Thailand 100 100 investment Management Thailand 100 -

Investment portion of 45.30% represents direct holding in Maerim Terrace Resort Limited. Another 25.74% indirect holding is invested through subsidiary. Investment portion of 51% represents direct holding in MST. Another 49% indirect holding is invested through subsidiary. Investment portion of 91.35% represents direct holding in MINOR. Another 8.57% indirect holding is invested through subsidiary. Investment portion of 99.86% represents direct holding in Sub Thawee Property Fund. Another 0.14% indirect holding is invested through subsidiary. Paid-up capital of Sub Thawee Property Fund is investment in Class B and Class C unitholders.


092

2011 Annual Report

Companies under subsidiaries included in the preparation of the consolidated f inancial statements are: Company

Nature of business

Company - 31 December Country of Investment portion (%) incorporation 2011 2010

MFG’s subsidiaries

Swensen’s (Thai) Limited Sales of food Thailand 100 100 and beverage Minor Cheese Limited Manufacturing and Thailand 100 100 sales of cheese Minor Dairy Limited Manufacturing and Thailand 100 100 sales of ice-cream Minor DQ Limited Sales of food Thailand 100 100 and beverage Catering Associates Limited Catering service Thailand 51 51 Burger (Thailand) Limited Sales of food Thailand 95 95 and beverage International Franchise Holding Franchise owner Malaysia 100 100 (Labuan) Limited SLRT Limited Sales of food Thailand 100 100 and beverage Primacy Investment Limited Holding investment Republic of 100 100 Mauritius The Coffee Club (Thailand) Limited Sales of food Thailand 100 100 and beverage

International Franchise Holding (Labuan) Limited’s subsidiaries

Franchise Investment Corporation Franchise owner British Virgin Islands of Asia Ltd. The Minor Food Group (China) Sales of food People’s Republic Limited and beverage of China

100

100

100

100

Primacy Investment Limited’s subsidiaries

Delicious Foodstuff (Labuan) Limited Holding investment Malaysia Delicious Beverage (Labuan) Limited Holding investment Malaysia Delicious Food Holding Holding investment Singapore (Singapore) Pte. Ltd. ThaiExpress Concepts Pte. Ltd. Holding investment Singapore

100 100 100

100 100 100

100

70


Minor International Public company limited

Company

Nature of business

093

Company - 31 December Country of Investment portion (%) incorporation 2011 2010

Delicious Food Holding (Singapore) Pte. Ltd.’s subsidiaries

Delicious Food Holding (Australia) Holding investment Pte. Ltd. Delicious Food Australia Finance Pty. Ltd. Management MHG Hotel Holding Australia Pty. Ltd. Holding investment

Australia

100

100

Australia Australia

100 100

-

MHG Hotel Holding Australia Pty. Ltd.’s subsidiary

Oaks Hotels & Resorts Limited (“OAKS”)

Providing services for accommodation

Australia

100

-

MSpa International Limited’s subsidiaries

MSpa Ventures Limited Spa services British Virgin Islands MSpa Enterprise Management Spa services People’s Republic (Shianghai) Limited of China

100 100

100 100

Minor Hotel Group Limited’s subsidiary

Hospitality Investment International Holding investment British Virgin Islands Limited

100

100

Hospitality Investment International Limited’s subsidiaries

Lodging Management (Labuan) Limited Hotel management Lodging Management (Mauritius) Hotel management Limited PT Lodging Management (Indonesia) Hotel Limited management Jada Resort and Spa (Private) Hotel operation Limited (formerly “Cyprea Lanka (Private) Limited”) Elewana Investment Limited Holding investment

Malaysia Republic of Mauritius Indonesia

100 100

100 100

93.3

93.3

Sri Lanka

80.1

80.1

Republic of Mauritius

100

-

Royal Garden Development Limited’s subsidiaries

Rajadamri Residence Limited Rajadamri Lodging Limited

Hotel and sales of property Hotel operation

Thailand

-

100

Thailand

-

100


094

2011 Annual Report

Company

Nature of business

Company - 31 December Country of Investment portion (%) incorporation 2011 2010

MI Squared Limited’s subsidiaries

Rajadamri Residence Limited Rajadamri Lodging Limited

Hotel and sales of property Hotel operation

Thailand

100

-

Thailand

100

-

AVC Vacation Club Limited’s subsidiary

Anantara Vacation Club (HK) Limited

Marketing services

Hong Kong

100

-

ThaiExpress Concepts Pte. Ltd.’s subsidiaries

BBZ Design International Pte. Ltd. NYS Pte. Ltd. PS07 Pte. Ltd. TES07 Pte. Ltd. XWS Pte. Ltd. Shokudo Concepts Pte. Ltd. Shokudo Heeren Pte. Ltd. The Bund Pte. Ltd. Lotus Sky Sdn Bhd. ThaiExpress Concepts Sdn Bhd.

Sales of food and beverage Sales of food and beverage Sales of food and beverage Sales of food and beverage Sales of food and beverage Sales of food and beverage Sales of food and beverage Sales of food and beverage Sales of food and beverage Sales of food and beverage

Singapore

100

100

Singapore

100

100

Singapore

100

100

Singapore

100

100

Singapore

100

100

Singapore

100

100

Singapore

100

100

Singapore

100

100

Malaysia

100

100

Malaysia

100

100

BBZ Design International Pte. Ltd.’s subsidiary

Element Spice Cafe Pte. Ltd. (formerly “NYNY Pte. Ltd.”)

Sales of food and beverage

Singapore

100

100

MINOR’s subsidiaries

Armin Systems Limited

Distribution - kitchen utensils, garment and shoes

Thailand

100

100


Minor International Public company limited

Company NMT Limited Minor Development Limited Minor Consultants & Services Limited Red Earth Thai Limited Esmido Fashions Limited Amore Pacific (Thailand) Limited Marvelous Wealth Limited

Nature of business

095

Company - 31 December Country of Investment portion (%) incorporation 2011 2010

Manufacturing Thailand 100 100 services consumer products Property Thailand 100 100 development Distribution - Thailand 100 100 cosmetics and luggage Distribution - Thailand 100 100 cosmetics and perfume Distribution - Thailand 90.8 90.8 garments Distribution - Thailand 51 51 cosmetics and perfume Holding investment British Virgin 100 100 Islands

OAKS’s subsidiaries

Boathouse Management Pty. Ltd. Calypso Plaza Management Pty. Ltd. Concierge Apartments Australia Pty. Ltd. Goldsborough Management Pty. Ltd. IMPROPERTY Pty. Ltd. Oaks Hotels & Resorts (Qld) Pty. Ltd. Oaks Hotels & Resorts (NSW) Pty. Ltd. Oaks Hotels & Resorts (NSW) No. 1 Pty. Ltd. Oaks Hotels & Resorts (NSW) No. 2 Pty. Ltd. Oaks Hotels & Resorts (SA) Pty. Ltd.

Providing services Australia 100 - for accommodation Providing services Australia 100 - for accommodation Providing services Australia 100 - for accommodation Providing services Australia 100 for accommodation Providing services Australia 100 - for accommodation Providing services Australia 100 - for accommodation Providing services Australia 100 - for accommodation Providing services Australia 100 - for accommodation Providing services Australia 100 - for accommodation Providing services Australia 100 - for accommodation


096

2011 Annual Report

Company Oaks Hotels & Resorts (VIC) Pty. Ltd. Queensland Accommodation Corporation Pty. Ltd. Seaforth Management Pty. Ltd. 183 on Kent Management Pty. Ltd. 187 Kent Pty. Ltd. 361 Kent Pty. Ltd. Pacific Hotel Market Street Pty. Ltd. Pacific Blue Management Pty. Ltd. Queen Street Property Management Pty. Ltd. The Oaks Resort & Hotel Management Pty. Ltd. Furniture Services Australia Pty. Ltd. Brisbane Apartment Management Pty. Ltd. Housekeepers Pty. Ltd. Oaks Hotels & Resorts (Nth Qld) Pty. Ltd. Kent Street Sydney Pty. Ltd. Oaks Hotels & Resorts NZ Ltd. 187 Cashel Apartments Ltd. Oaks Cashel Management Ltd. Oaks 187 Cashel Management Ltd. Oaks Hotels & Resorts JLT Ltd. Oaks Hotels & Resorts Investments Pty. Ltd. Regis Towers Management Pty. Ltd.

Nature of business

Company - 31 December Country of Investment portion (%) incorporation 2011 2010

Providing services Australia 100 - for accommodation Providing services Australia 100 - for accommodation Providing services Australia 100 - for accommodation Providing services Australia 100 - for accommodation Providing services Australia 100 - for accommodation Providing services Australia 100 - for accommodation Providing services Australia 100 - for accommodation Providing services Australia 100 - for accommodation Providing services Australia 100 - for accommodation Providing services Australia 100 - for accommodation Providing services Australia 100 - for accommodation Providing services Australia 100 - for accommodation Providing services Australia 100 - for accommodation Investment holding Australia 100 - Investment holding Australia 100 - Providing services New Zealand 100 - for accommodation Providing services New Zealand 100 - for accommodation Providing services New Zealand 100 - for accommodation Providing services New Zealand 100 - for accommodation Providing services The United 100 - for accommodation Arab Emirates Investment holding Australia 100 Providing services for accommodation

Australia

50

-


Minor International Public company limited

097

Thai Assets Management Property Fund On 24 December 2002, the Group invested in the Thai Assets Management Property Fund which is registered with the Securities and Exchange Commission. The Fund was established for the purpose of investment in real estate. The financial statements of the Property Fund are fully consolidated in the consolidated financial statements because the Group has power to exercise control over the financing and operating polices of the Property Fund. As at 31 December 2011, the Group holds 100% of the property Fund’s Class C and Class D units. The Class C and Class D unitholders have the right to receive dividends after dividends are paid to Class A and Class B unitholders. As at 31 December 2011, the Class A and Class B unitholders have investments amounting to Baht 125 million (2010: Baht 225 million). These unitholders will receive dividends at the specified interest rates and have rights to receive dividends before other classes of unitholders. Such capital of Class A and Class B unitholders is classified as borrowings (Note 21) according to its underlying substance.

Changes in investments in subsidiaries for the year ended 31 December 2011 comprise:

Royal Garden Development Limited On 1 June 2011, Royal Garden Development Limited, a subsidiary of the Company, had entire business transfer of its assets and liabilities to MI Squared Limited, another subsidiary of the Company, at fair value or equivalent to comply with the Revenue Code. At the Extraordinary Shareholders’ Meeting of this company on 1 June 2011, it was resolved to liquidate this company and registered the liquidation with the Ministry of Commerce on 1 June 2011. Currently, it is in the liquidation process. On 15 June 2011, the liquidator of this company was resolved that this company returned partial share capital to the shareholders of Baht 1,346 million. The Company received money and recognised gain from capital return from this subsidiary of Baht 418 million. This gain is presented in other income of the Company’s financial statements. Oaks Hotels & Resorts Limited (“OAKS”) During the first quarter of 2011, a subsidiary of the Group acquired ordinary shares of Oaks Hotels & Resorts Limited (“OAKS”), a listed company in the Australian Security Exchange, of 26 million shares totalling AUD 9.1 million (equivalent to Baht 274 million). The investment portion is 14.99%. During the second quarter of 2011, the subsidiary additionally acquired ordinary shares of 8.7 million shares totalling AUD 3.0 million (equivalent to Baht 95 million). This made the Group increase the investment portion to 19.96%. The investment was classified as other long-term investment. During the second quarter of 2011, another subsidiary of the Group has entered into tender offer agreement of OAKS and acquired 131.1 million ordinary shares, totalling Baht 2,194 million which represented 75.43% of OAKS’s paid-up shares. The investment in OAKS changed from “Other long-term investment” to “Investment in subsidiary” at the date that the Group has control of OAKS. The Group adjusted fair value of this investment at that date and recognised gain on fair value adjustment of Baht 203.2 million in the income statement.


098

2011 Annual Report

During the third quarter and the forth quarter of 2011, the Group acquired additional shares from the process of compulsory acquisition of 0.17% of paid-up shares from minority shareholders of OAKS. As at 31 December 2011, the Group had an investment in OAKS representing 100% interest amounting to Baht 2,880 million and an outstanding liability of AUD 0.16 million (equivalent to Baht 5.2 million), presented it in other current liabilities. OAKS has completed the process of de-listing from Australian Securities Exchange on 31 October 2011. The financial statements of OAKS has included in the consolidated f inancial statements on 26 May 2011 that the Group has control over this subsidiary.

Details of the acquisition are as follows:

Baht Purchase consideration Net carrying value of OAKS under interest acquired Purchases price over net assets presented in goodwill

2,879,934,938 (2,264,373,034) 615,561,904

The book value at 100% interest of assets and liabilities acquired in OAKS at the date that the Group has control over this subsidiary are as follows:

Baht Cash and cash equivalents Trade accounts receivable Inventories Investment property Property, plant and equipment, net Intangible assets, net Other assets Trade accounts payable Long-term loan from financial institution Liabilities under financial lease agreement Accrued expenses and other liabilities Book value of net assets Interest acquired Book value of net assets acquired

150,989,989 302,926,470 84,989,301 57,412,511 1,622,288,935 2,742,250,893 488,868,760 (324,731,217) (1,897,986,000) (350,510,782) (612,125,826) 2,264,373,034 100% 2,264,373,034


Minor International Public company limited

099

Net assets from acquisition of investment in OAKS are stated at the net book value of tangible and intangible assets and liabilities at the date of acquisition. The Group is in the process of appraising the fair value of tangible and intangible assets and liabilities and the adjustments to fair value will be done. The difference between net book value and net fair value will be adjusted with goodwill. Elewana Investment Limited During the second quarter of 2011, a subsidiary of the Group acquired ordinary shares of Elewana Investment Limited of 1,000 shares with a par value of USD 1. Anantara Vacation Club (HK) Limited During the second quarter of 2011, a subsidiary of the Company acquired ordinary shares of Anantara Vacation Club (HK) Limited of 10,000 shares with a par value of HKD 1. Delicious Food Australia Finance Pty. Ltd. During the third quarter of 2011, a subsidiary of the Group acquired ordinary shares of Delicious Food Australia Finance Pty. Ltd. of 100 shares with a par value of AUD 1. During the forth quarter of 2011, Delicious Food Australia Finance Pty. Ltd. issued redeemable preference share of 59,000,000 shares with par value of AUD 1 per share, totaling AUD 59,000,000 to Delicious Food Holding (Singapore) Pte. Ltd. MHG Hotel Holding Australia Pty. Ltd. During the third quarter of 2011, a subsidiary of the Group acquired ordinary shares of MHG Hotel Holding Australia Pty. Ltd., a new established company, of 100 shares with a par value of AUD 1. Jada Resort and Spa (Private) Limited (formerly “Cyprea Lanka (Private) Limited”) On 9 August 2010, a subsidiary of the Group acquired ordinary shares of Jada Resort and Spa (Private) Limited (formerly “Cyprea Lanka (Private) Limited”) of 82,010,192 ordinary shares with a par value of 10 Sri Lanka Rupee, totaling USD 11,399,948 or Baht 366.1 million, representing 80.10% of this company’s paid-up shares. During the third quarter of 2011, the Group completed calculating net asset fair value of this company. In consideration of fair value of asset, the Group determined the measurement of the asset and considers the possibility that the Group received economic benefit reasonably. The f inancial statements of Jada Resort and Spa (Private) Limited has included in the consolidated financial statements since the date that the Group has control over this subsidiary.


100

2011 Annual Report

Details of the acquisition are as follows:

Baht Purchasing consideration Net fair value of Jada Resort and Spa (Private) Limited under interest acquired Goodwill

366,825,199 (193,389,845) 173,435,354

On the acquisition date, the fair value at 80.10% interest of assets and liabilities acquired in Jada Resort and Spa (Private) Limited are as follows:

Baht Cash and cash equivalents Trade accounts receivable Inventories Property, plant and equipment, net Leasehold right, net Trade accounts payable Payables from related parties Accrued expenses and other liabilities Fair value of net assets Interest acquired Fair value of net assets acquired (Baht)

1,784,739 16,239,742 3,666,692 253,916,195 9,198,689 (7,464,705) (16,837,453) (19,068,388) 241,435,511 80.10% 193,389,845

Phuket Beach Club Owner Limited During the forth quarter of 2011, the Company acquired ordinary shares of Phuket Beach Club Owner Limited of 10,000 shares with a par value of Baht 100. However, the Company has not paid for those share subscription to this company. ThaiExpress Concepts Pte. Ltd. During the forth quarter of 2011, a subsidiary of the Group acquired additional shares of 90,000 shares totalling SGD 16.8 million (equivalent to Baht 402.97 million) from minority shareholders of ThaiExpress Concepts Pte. Ltd. This made the Group increase the investment portion from 70% to 100% and recognise discount from additional investment in this subsidiary amounting to Baht 32,750,744 in the shareholders’ equity.


Minor International Public company limited

101

Amore Pacific (Thailand) Limited During the forth quarter of 2011, a subsidiary of the Group has entered into the agreement to sell its entire investment of 140,000 shares, representing 51% holding, in Amore Pacific (Thailand) Limited to Amore Pacific Global Operations Limited amounting to Baht 12.05 million. However, this transaction has not been completed within reporting period. b) Investments in associates The Group’s share of the result of its principal associates, all of which are unlisted, and its share of the assets including goodwill and liabilities are as follows:

Consolidated

Company

2011 2010 2011 2010 Baht Baht Baht Baht At 1 January 1,521,253,975 1,338,996,099 - - Additions 427,616,362 - 345,672,880 - Transfer from other long-term investment (Note 13) 1,804,523,000 - 1,804,523,000 - Transfer from advance for share subscription (HVC) - 17,707,880 - - Provision for additional payment of investment - 22,775,100 - - Share of profit of investments in associates 266,414,538 216,037,952 - - Dividends received (114,198,026) (74,263,056) - - At 31 December 3,905,609,849 1,521,253,975 2,150,195,880 -


102

2011 Annual Report

Companies under associates comprise:

Company

Consolidated - 31 December Nature of Country of Investment portion (%) business incorporation 2011 2010

Arabian Spa (Dubai) (LLC) Spa services United Arab 49 49 Emirates Eutopia Private Holding Limited Hotel operation Republic of 50 50 Maldives Tanzania Tourism and Hospitality Holding investment British Virgin 50 50 Investment Limited Islands Zanzibar Tourism and Hospitality Holding investment British Virgin 50 50 Investment Limited Islands The Coffee Club Holdings Pty. Ltd. Holding investment Australia 50 50 Sizzler China Pte. Limited Franchise owner Singapore 50 50 Select Service Partner Limited Sales of food Thailand 51 51 and beverage Harbour View Corporation Limited Hotel operation Vietnam 30.4 30.4 (1) - Zuma Bangkok Limited Sales of food Thailand 51 and beverage Tidal Swell Pty. Ltd. Providing services Australia 25 - for accommodation S&P Syndicate Public Company Sales of food Thailand 31.3 Limited and beverage (1)

Investment portion in Zuma Bangkok Limited is 51% but the Group has voting right at 35%.

Company S&P Syndicate Public Company Limited

Nature of business

Company - 31 December Country of Investment portion (%) incorporation 2011 2010

Sales of food Thailand and beverage

31.3

-


Minor International Public company limited

103

The Group’s share of the results of its principal associates and its share of the assets and liabilities are as follows:

Assets Baht

Liabilities Baht

Revenues Baht

Profit/(loss) Baht

Year ended 31 December 2011 Hotel operation and related services 1,540,268,512 1,292,703,186 813,866,872 60,977,317 Sales of food and beverage 1,620,439,494 827,985,669 2,996,094,424 205,437,221 3,160,708,006 2,120,688,855 3,809,961,296 266,414,538

Assets Baht

Liabilities Baht

Revenues Baht

Profit/(loss) Baht

Year ended 31 December 2010 Hotel operation and related services 1,194,700,151 1,054,110,020 655,491,928 79,271,750 Sales of food and beverage 393,577,097 211,316,220 969,408,932 136,766,202 1,588,277,248 1,265,426,240 1,624,900,860 216,037,952

Companies under associates comprise:

Company

Consolidated - 31 December Nature of Country of Investment portion (%) business incorporation 2011 2010

Tanzania Tourism and Hospitality Investment Limited’s subsidiaries

Elewana Afrika (T) Limited Hotel operation United Republic of Tanzania Elewana Afrika Limited Holding Investment Kenya

100

100

100

100

100

100

100

100

100 100 100

100 - -

Zanzibar Tourism and Hospitality Investment Limited’s subsidiaries

Elewana Afrika (Z) Limited Hotel operation United Republic of Tanzania The Grande Stone Town Limited Holding Investment United Republic of Tanzania Elewana Afrika Limited’s subsidiaries Flora Holding Limited Holding Investment Kenya Rocky Hill Limited Hotel operation Kenya Sand River Eco Camp Limited Hotel operation Kenya


104

2011 Annual Report

Company

Consolidated - 31 December Nature of Country of Investment portion (%) business incorporation 2011 2010

Flora Holding Limited’s subsidiary

Parrots Limited Hotel operation Kenya 100 100 The Grande Stone Town Limited’s subsidiary

Parachichi Limited Hotel operation United Republic of Tanzania

100

100

Select Service Partner Sale of food The Kingdom of 100 (Cambodia) Limited and beverage Cambodia

100

Select Service Partner Limited’s subsidiary

The Coffee Club Holdings Pty. Ltd.’s subsidiaries

Expresso Pty. Ltd. Property investment The Coffee Club Investment Pty. Ltd. Franchise owner The Coffee Club Franchising Franchise business Company Pty. Ltd. The Coffee Club (NSW) Pty. Ltd. Property investment The Coffee Club (Vic) Pty. Ltd. Property investment The Coffee Club (Properties) Pty. Ltd. Property investment The Coffee Club Properties (NSW) Property investment Pty. Ltd. The Coffee Club Pty. Ltd. (as trustee for Franchise owner The Coffee Club Unit Trust) The Coffee Club (International) Pty. Ltd. Franchise owner The Coffee Club (Korea) Pty. Ltd. Franchise owner The Coffee Club (Mena) Pty. Ltd. Franchise owner The Coffee Club (NZ) Pty. Ltd. Franchise owner First Avenue Company Pty. Ltd. Sale of food and beverage Ribs and Rumps Holding Pty. Ltd. Sale of food and beverage

Australia Australia Australia

100 100 100

100 100 100

Australia Australia Australia Australia

100 100 100 100

100 100 100 100

Australia

100

100

Australia Australia Australia Australia Australia

100 100 100 100 100

100 100 100 100 100

Australia

100

-


Minor International Public company limited

105

Select Service Partner Limited Investment in Select Service Partner Limited is classif ied as associated company in the consolidated f inancial statements because the Group does not have control over this company although the Group holds equity interest of 51%. The equity method of accounting is applied to this investment in the consolidated financial statements.

Changes in investments in associates for the year ended 31 December 2011 comprise:

Zuma Bangkok Limited During the first quarter of 2011, a subsidiary of the Group acquired ordinary shares of Zuma Bangkok Limited of 81,600 shares with a par value of Baht 100. The subsidiary paid for those share subscriptions to this company in the second quarter of 2011. S&P Syndicate Public Company Limited (“S&P”) During the third quarter of 2011, the board of directors passed the resolution to have the intention to hold the investment in S&P in the long-term period. The Company has entered into the process of voluntary tender offer at Baht 70 per share which is the fair value assessed by the financial advisor. The investment in S&P changed from “Other long-term investment” to “Investment in associate” at the date that the Group has significant influence of S&P. The Group adjusted fair value of this investment at that date and recognised gain on fair value adjustment of Baht 1,053.8 million in the income statement of the consolidated and Company financial statements. As at 13 October 2011, the Company completed the process of voluntary tender offer and could additionally acquire shares from this tender offer of 4,938,184 shares totalling Baht 345.7 million, which represented 5.03% of S&P paid-up shares. Ribs and Rumps Holdings Pty. Ltd. During the third quarter of 2011, an associate of the Group acquired ownership of assets of Ribs and Rumps Holdings Pty. Ltd. totalling AUD 11 million or Baht 362.2 million. Tidal Swell Pty. Ltd. During the forth quarter of 2011, a subsidiary of the Group acquired 25% ordinary shares of Tidal Swell Pty. Ltd. totalling AUD 2.4 million or Baht 71.7 million.


106

2011 Annual Report

c) Interests in joint ventures

Consolidated

Company

2011 2010 2011 2010 Baht Baht Baht Baht At 1 January 14,605,306 14,100,483 24,284,460 24,284,460 Addition 7,515,000 - - - Share of profit (loss) of interests in joint ventures (2,599,623) 504,823 - - At 31 December 19,520,683 14,605,306 24,284,460 24,284,460

The jointly controlled entities are:

Company Maikhao Vocation Villas Limited Thaisale.co.th Limited

Company Maikhao Vocation Villas Limited

Consolidated - 31 December Nature of Country of Investment portion (%) business incorporation 2011 2010 Sales of right-to-use Thailand 50 50 in time sharing resort Distribution Thailand 50.1 -

Nature of business Sales of right-to-use in time sharing resort

Company - 31 December Country of Investment portion (%) incorporation 2011 2010 Thailand

50

50


Minor International Public company limited

107

The following amounts represent the Group’s share of the assets and liabilities and sales and results of the joint ventures and are included in the statement of financial position and income statements:

Consolidated

2011 Baht

2010 Baht

Non-current assets Current assets Total assets Current liabilities Total liabilities Net assets Revenues Expenses

2,204,761 22,391,962 24,596,723 (8,522,059) (8,522,059) 16,074,664 461,077 (3,060,700)

- 11,415,788 11,415,788 (117,419) (117,419) 11,298,369 1,942,486 (1,437,663)

There are no contingent liabilities relating to the Group’s interest in the joint ventures.

Change in interests in joint ventures for the year ended 31 December 2011 comprises:

Thaisale.co.th Limited During the third quarter of 2011, a subsidiary of the Group acquired ordinary shares of Thaisale.co.th Limited, a new established company, of 150,298 shares with a par value of Baht 100. The ordinary shares were paid-up 50%.

d)

Provision for investment in associate

As at 31 December 2011, the Group had provision for investment in associate amounting to USD 0.75 million. (2010: USD 1.5 million). 13. Other long-term investments

Other companies Related companies Other long-term investments

Consolidated 2011 Baht 147,073 159,853,851 160,000,924

2010 Baht 669,539 1,914,936,740 1,915,606,279

Company 2011 2010 Baht Baht 121,849 24,765 - 1,804,523,000 121,849 1,804,547,765


108

2011 Annual Report

a) Investments in other companies

Opening net book amount Additions Disposals Reversal of fair value of investment Changes in fair value of investments Ending net book amount

Consolidated 2011 Baht 669,539 97,898 (625,000) - 4,636 147,073

2010 Baht 27,410,070 5,023,938 (35,756,480) 3,983,988 8,023 669,539

Company 2011 Baht 24,765 97,898 - - (814) 121,849

2010 Baht 19,318 - - - 5,447 24,765

Investments in other companies as at 31 December comprises:

Consolidated

2011 Baht

2010 Baht

Available-for-sale securities, cost Changes in fair value of investments Available-for-sale securities, net General investments, cost Less Impairment loss General investments, net Investments in the other companies, net

107,532 26,317 133,849 2,163,574 (2,150,350) 13,224 147,073

9,634 21,681 31,315 2,788,574 (2,150,350) 638,224 669,539

Company

2011 Baht

2010 Baht

Available-for-sale securities, cost Changes in fair value of investments Investments in the other companies, net

105,933 15,916 121,849

8,034 16,731 24,765


Minor International Public company limited

109

b) Investments in related companies

Consolidated

Company

2011 2010 2011 2010 Baht Baht Baht Baht Opening net book amount 1,914,936,740 812,421,239 1,804,523,000 743,792,300 Additions 27,699,316 67,982,519 - 67,982,519 Transfer to investment in associate (Note 12 b) (1,804,523,000) - (1,804,523,000) - Change in fair value of investments 21,740,795 1,034,532,982 - 992,748,181 Ending net book amount 159,853,851 1,914,936,740 - 1,804,523,000


b) Investments in related companies (Continued)

Change in fair value (Baht)

Net investment (Baht)

31 December 2010 Available-for-sale securities 490 26.28 750,711,496 1,053,811,504 1,804,523,000 S&P Syndicate Public Sale of food Thailand Shareholder Company Limited and beverage 120 19.84 43,959,447 66,454,293 110,413,740 Serendib Hotels Limited Hotel Sri Lanka Shareholder (412 Sri Lanka Rupee Million) Total investments in related Company 794,670,943 1,120,265,797 1,914,936,740

31 December 2011 Available-for-sale securities 160 19.84 71,658,763 88,195,088 159,853,851 Serendib Hotels Limited Hotel Sri Lanka Shareholder (570 Sri Lanka Rupee Million) Total investments in related companies 71,658,763 88,195,088 159,853,851

Consolidated Paid-up Investment Country of Nature of capital portion Cost Nature of business incorporation relationship (Baht Million) (%) (Bath)

110 2011 Annual Report


b) Investments in related companies (Continued)

Change in fair value (Baht)

Net investment (Baht)

As at 31 December 2011, the Group has no investment in available-for-sale securities.

31 December 2010 Available-for-sale securites 490 26.28 750,711,496 1,053,811,504 1,804,523,000 S&P Syndicate Public Sale of food Thailand Shareholder Company Limited and beverage Total investment in related company 750,711,496 1,053,811,504 1,804,523,000

Company Paid-up Investment Nature of Country of Nature of capital portion Cost (%) (Baht) business incorporation relationship (Baht Million)

Minor International Public company limited

111


112

2011 Annual Report

Change in other long-term investments for the year ended 31 December 2011 comprise:

Serendib Hotels PLC At the Board of Directors’ Meeting of Serendib Hotels PLC on 1 April 2011, it was resolved to split ordinary voting and non-voting share’s of the Company in the proportion of five shares for every one share held, The number of shares held by the Group increased to 11,977,605 ordinary voting shares and 5,725,400 ordinary non-voting shares. During the second quarter of 2011, this company increased its registered share capital of 15,102,948 ordinary voting shares and 7,202,211 ordinary non-voting shares with par value of Sri Lanka Rupee 24.50 and Sri Lanka Rupee 18.25, respectively. The Group acquired the ordinary shares of 2,994,401 ordinary voting shares and 1,431,350 ordinary non-voting shares, totalling Sri Lanka Rupee 99.49 million (equivalent to Baht 28 million). Additional acquisition of these ordinary shares do not change the investment portion of the Group. 14. Related party transactions

Enterprises and individuals that directly, or indirectly through one or more intermediaries, control, or are controlled by, or are under common control with, the Company, including holding companies, subsidiaries and fellow subsidiaries are related parties of the Company. Associates and individuals owning, directly or indirectly, an interest in the voting power of the Company that gives them significant influence over the enterprise, key management personnel, including directors and officers of the Company and close members of the family of these individuals and companies associated with these individuals also constitute related parties. In considering each possible related party relationship, attention is directed to the substance of the relationship and not merely the legal form.

The Company is the ultimate parent company.

The Minor Food Group Public Company Limited (“MFG”) and Minor Corporation Public Company Limited (“MINOR”) are subsidiaries. Therefore, the companies under MFG, and MINOR are considered as related parties of the Group.


Minor International Public company limited

113

The following transactions were carried out with related parties:

Consolidated

2011 Baht

Company 2010 Baht

2011 Baht

2010 Baht

Revenues Sales Associates and joint ventures 84,228,626 65,095,299 - - Total sales 84,228,626 65,095,299 - Sale of real estate Related party 136,457,250 - - - Total sale of real estate 136,457,250 - - Rental income Subsidiaries - - 43,049,477 41,807,093 Associates and joint ventures - 630,000 - - Related parties 462,977 240,862 - - Total rental income 462,977 870,862 43,049,477 41,807,093 Interest income Subsidiaries - - 647,232,838 459,489,624 Associates and joint ventures 13,048,268 14,352,304 - - Total interest income 13,048,268 14,352,304 647,232,838 459,489,624 Management fee income Subsidiaries - - 206,805,183 236,034,619 Associates and joint ventures 149,237,764 96,779,087 - - Related parties 7,343,444 12,889,523 600,000 8,313,389 Total management fee income 156,581,208 109,668,610 207,405,183 244,348,008

Management fee income is mainly from hotel, information system and finance management.


114

2011 Annual Report

Consolidated

2011 Baht

Company 2010 Baht

2011 Baht

2010 Baht

Revenues (Continued) Dividend income Subsidiaries - - 409,147,880 1,474,516,784 Associates and joint ventures 114,198,026 74,262,932 - - Related parties 83,784,050 80,210,350 83,784,050 80,210,350 Total dividend income 197,982,076 154,473,282 492,931,930 1,554,727,134 Other income Subsidiaries - - 7,263,814 3,443,494 Associates and joint ventures 6,434,340 7,948,928 180,536 183,467 Total other income 6,434,340 7,948,928 7,444,350 3,626,961 Gain from capital returned Subsidiary - - 418,150,898 - Total gain from capital returned - - 418,150,898 Expenses Purchases Associates and joint ventures 11,586,630 - - - Related parties 37,170,477 43,572,675 - - Total purchases 48,757,107 43,572,675 - Rental expenses Subsidiaries - - 65,631,410 57,996,655 Related parties 13,683,088 10,576,116 - - Total rental expenses 13,683,088 10,576,116 65,631,410 57,996,655 Interest expenses Subsidiaries - - 27,028,995 14,490,731 Total interest expenses - - 27,028,995 14,490,731 Management fee expenses Subsidiaries - - 66,879,391 70,316,684 Associates and joint ventures - - 157,433 - Total management fee expenses - - 67,036,824 70,316,684


Minor International Public company limited

Consolidated

2011 Baht

115

Company 2010 Baht

2011 Baht

2010 Baht

Expenses (Continued) Royalty fee Subsidiaries - - 646,456 581,573 Total royalty fee expenses - - 646,456 581,573 Other expenses Subsidiaries - - 55,819 - Related parties 23,561,198 18,513,112 8,094,123 16,171,713 Total other expenses 23,561,198 18,513,112 8,149,942 16,171,713 Management benefit expenses Management benef it expenses for the year ended 31 December 2011 comprised short-term benef its such as salaries, bonus and other allowances amounting to Baht 148,049,646 (2010: Baht 117,732,863) for the consolidated financial statements and Baht 81,208,366 (2010: Baht 62,384,781) for the Company financial statements. As at 31 December 2011 and 2010, outstanding balances arising from receivable, payable, advances and loans from/to related parties are summarised as follows:

Consolidated

2011 Baht

Company 2010 Baht

2011 Baht

2010 Baht

Receivables from: Subsidiaries - - 640,911,198 582,849,409 Associates and joint ventures 221,585,241 47,376,548 70,236,720 1,666,610 Related parties 757,137 18,728,180 9,144 380,328 Total receivables from related parties 222,342,378 66,104,728 711,157,062 584,896,347 Long-term loans to related parties: Subsidiaries - - 14,833,186,192 13,068,542,277 Associates and joint ventures 507,373,802 384,728,390 - - Total long-term loans to related parties 507,373,802 384,728,390 14,833,186,192 13,068,542,277


116

2011 Annual Report

Long-term loans to related parties are unsecured and denominated in Thai Baht. They carry interest rate at the market interest with reference to the interest rate quoted by commercial banks. The loans are due for repayment at call but the Group will not call the loans for settlement within the following year.

Consolidated

2011 Baht

Company 2010 Baht

2011 Baht

2010 Baht

Short-term loans from related parties: Subsidiaries - - 1,549,601,374 1,376,380,033 Payables to: Subsidiaries - - 4,588,935 9,909,403 Associates and joint ventures 20,359,332 1,642,757 5,172 - Related parties 11,088,121 14,388,963 1,994,714 93,594 Total payables to related parties 31,447,453 16,031,720 6,588,821 10,002,997 Short-term loans from subsidiaries are unsecured and denominated in Thai Baht. They are due at call and carry interest rate at the market interest with reference to the interest rate quoted by commercial banks. 15. Land and projects under development

Land and projects under development are stated at cost and are held by the following subsidiaries:

Consolidated

2011 Baht Minor International (Labuan) Limited Samui Beach Club Owner Limited Chao Phaya Resort and Residence Limited Rajadamri Lodging Limited Total land and projects under development

- 30,707,270 2,390,494 - 33,097,764

2010 Restated Baht 1,674,332,280 181,111,847 2,390,494 2,097,514,802 3,955,349,423


Minor International Public company limited

117

As at 31 December 2011, land and projects under development of Minor International (Labuan) Limited, Rajadamri Lodging Limited and a project of Samui Beach Club Owner Limited were completed and transferred to property, plant and equipment amounting to Baht 4,587,061,754 (Note 17).

Consolidated Baht Million Commitments in respect of construction contracts and purchases of assets as at 31 December 2011 1 Commitments in respect of construction contracts and purchases of assets as at 31 December 2010 315

16. Investment properties

Land and land improvement Baht

Consolidated Buildings and building improvement Baht

Total Baht

At 1 January 2010 Cost 356,642,414 1,450,409,441 1,807,051,855 Less Accumulated depreciation (1,335,681) (777,887,179) (779,222,860) Net book amount 355,306,733 672,522,262 1,027,828,995 Year ended 31 December 2010 Opening net book amount 355,306,733 672,522,262 1,027,828,995 Additions - 2,568,660 2,568,660 Depreciation (118,219) (80,150,381) (80,268,600) Closing net book amount 355,188,514 594,940,541 950,129,055 As at 31 December 2010 Cost 356,642,414 1,452,978,101 1,809,620,515 Less Accumulated depreciation (1,453,900) (858,037,560) (859,491,460) Net book amount 355,188,514 594,940,541 950,129,055


118

2011 Annual Report

Land and land improvement Baht

Consolidated Buildings and building improvement Baht

Year ended 31 December 2011 Opening net book amount 355,188,514 594,940,541 Additions - 10,246,529 Acquisition from investment in subsidiary (Note 12) - 57,412,511 Depreciation (115,647) (84,796,432) Translation adjustment - 596,459 Closing net book amount 355,072,867 578,399,608

Total Baht 950,129,055 10,246,529 57,412,511 (84,912,079) 596,459 933,472,475

As at 31 December 2011 Cost 356,642,414 1,521,244,057 1,877,886,471 Less Accumulated depreciation (1,569,547) (942,844,449) (944,413,996) Net book amount 355,072,867 578,399,608 933,472,475 Fair value 442,210,500 1,381,975,550 1,824,186,050 Amortisation of Baht 84,555,217 (2010: Baht 79,911,738) has been charged in the cost of sales and services and Baht 356,862 (2010: Baht 356,862) in administration expenses. The Group’s investment properties were revalued as at 31 December 2011 by independent professionally qualified valuers who hold a recognised relevant professional qualification and have recent experience in the locations and categories of the investment properties valued. A subsidiary of the Group has mortgaged freehold apartment amounting to AUD 1.8 million or equivalent to Baht 58 million (2010: Nil) to secure loans with foreign banks (Note 21).


Minor International Public company limited

119

Amount recognised in profit and loss which is relate to investment property are as follows:

2011 Baht

2010 Baht

Rental income 350,601,220 309,172,329 Direct operating expense arise from investment property that generated rental income 87,078,697 80,275,533 Capital commitments As at 31 December 2011, the Group has commitments for purchase of investment property amounting to AUD 0.7 million or equivalent to Baht 23 million (2010: Nil).


75,300,839 21,660,231 332,704 (215,032) (25,168) 975,825 - (23,577,527) - (110,282) 74,341,590

      1,023,894,287 5,382,285,633 1,731,254,452 1,201,855,240 560,339,254 66,239,202 13,660,560 101,043,785 189,435,889 96,349,448 22,974,609 20,297,175 92,717,669 407,873 13,573,665 (4,903) - (13,490,127) (13,453,283) (147,582) - - (28,187,541) (6,655,599) (973,793) 2,164,853 11,512,015 370,213,556 257,356,135 8,730,445 - - (3,458) 7,577,774 (119,490) (15,884,259) (344,402,505) (364,230,185) (389,918,274) (149,698,171) - - 9,272,256 (9,453,668) (5,625,677) (1,139,426) (1,029,404) (12,335,934) 132,329 (2,777,216) 1,098,244,363 5,082,323,474 1,886,254,473 1,237,284,416 519,650,883

Year ended 31 December 2010 Opening net book amount Additions Acquisition from investment in subsidiary Disposals, net Write-offs, net Reclassification Transfer from (to) other accounts Depreciation charge Impairment reversal (charge) Translation adjustment Closing net book amount

350,522,198 106,865,065 1,563,908 (2,935,603) (8,848,160) (46,488,494) (89,986,239) (33,631,872) 38,317 (978,786) 276,120,334

551,887,258 (201,326,743) (38,317) 350,522,198

Total

95,776,361 10,421,228,264 570,941,546 1,166,195,726 1,270,564 153,138,167 - (30,246,530) (562,347) (45,252,608) (604,464,335) - (3,923,290) (86,454,703) - (1,321,342,793) - (5,768,772) (726,964) (18,965,683) 58,311,535 10,232,531,068

95,776,361 21,356,257,973 - (10,896,791,628) - (38,238,081) 95,776,361 10,421,228,264

Operating Construction equipment in progress

At 31 December 2010 - Restated Cost 1,249,128,558 9,021,349,107 4,198,934,735 4,830,483,675 2,043,930,747 231,154,941 507,479,517 58,311,535 22,140,772,815 Less Accumulated depreciation (150,884,195) (3,939,025,633) (2,312,530,204) (3,563,885,926) (1,509,736,401) (156,813,351) (231,359,183) - (11,864,234,893 Less Provistion for impairment - - (150,058) (29,313,333) (14,543,463) - - - (44,006,854) Net book amount 1,098,244,363 5,082,323,474 1,886,254,473 1,237,284,416 519,650,883 74,341,590 276,120,334 58,311,535 10,232,531,068

221,751,402 (146,450,563) - 75,300,839

Motor vehicles

1,159,197,845 8,963,308,739 3,881,967,896 4,525,819,536 1,955,576,937 (135,303,558) (3,581,023,106) (2,141,291,131) (3,304,104,631) (1,386,319,897) - - (9,422,313) (19,859,665) (8,917,786) 1,023,894,287 5,382,285,633 1,731,254,452 1,201,855,240 560,339,254

Furniture, fixtures and office Other equipment equipment

Consolidated - Baht

At 1 January 2010 - Restated Cost Less Accumulated depreciation Less Provistion for impairment Net book amount

Land Building Building and and land and fitting leasehold improvement equipment improvement

17. Property, plant and equipment

120 2011 Annual Report


Furniture, fixtures and office Other equipment equipment

Consolidated - Baht Motor vehicles

Operating Construction equipment in progress

Total

At 31 December 2011 Cost 3,201,388,531 12,524,261,988 4,612,340,496 6,658,868,569 2,202,728,885 271,052,899 802,555,922 363,479,230 30,636,676,520 Less Accumulated depreciation (232,228,831) (4,370,616,387) (2,452,323,714) (4,159,557,996) (1,606,347,025) (183,126,777) (430,658,578) - (13,434,859,308) Less Provision for impairment - (21,943,535) (11,948,003) (29,889,896) (88,578) - (574,522) - (64,444,534) Net book amount 2,969,159,700 8,131,702,066 2,148,068,779 2,469,420,677 596,293,282 87,926,122 371,322,822 363,479,230 17,137,372,678

Year ended 31 December 2011 Opening net book amount 1,098,244,363 5,082,323,474 1,886,254,473 1,237,284,416 519,650,883 74,341,590 276,120,334 58,311,535 10,232,531,068 Additions 256,221,518 111,835,091 192,183,293 313,215,534 148,343,655 26,506,181 93,704,145 1,196,098,349 2,338,107,766 Acquisition from investment in subsidiary (Note 12) - 684,344,296 145,013,371 620,296,440 - - 132,260,161 40,374,667 1,622,288,935 Adjustment in fair value of assets from investment in subsidiary 121,075,203 (20,297,175) - - - - - - 100,778,028 Disposals, net - (5,841) (37,733,055) (21,039,533) (705,533) (3) (18,381,613) (1,275,700) (79,141,278) Write-offs, net - (10,128,238) (24,045,084) (8,809,446) (522,233) (75,513) (461,196) (306,449) (44,348,159) 85,000 74,537,641 388,233,840 444,857,893 35,140,444 14,649,493 (27,356,159) (930,148,152) - Reclassification Transfer from project under development 1,529,341,065 2,676,349,857 - 381,370,832 - - - - 4,587,061,754 Transfer from (to) other accounts (32,060,866) - 1,782,946 8,426,345 (14,022) - (40,156,431) (1,826) (62,023,854) Depreciation charge (78,825,983) (452,151,335) (408,990,953) (523,062,685) (123,513,078) (27,526,902) (46,346,617) - (1,660,417,553) Impairment reversal (charge) - (21,943,535) (11,797,945) (576,563) 14,454,886 - (574,522) - (20,437,679) Translation adjustment 75,079,400 6,837,831 17,167,893 17,457,444 3,458,280 31,276 2,514,720 426,806 122,973,650 Closing net book amount 2,969,159,700 8,131,702,066 2,148,068,779 2,469,420,677 596,293,282 87,926,122 371,322,822 363,479,230 17,137,372,678

Land Building Building and and land and fitting leasehold improvement equipment improvement

17. Property, plant and equipment (Continued)

Minor International Public company limited

121


Furniture, fixtures and office Other equipment equipment

Company - Baht Motor vehicles

Operating Construction equipment in progress

Total

At 31 December 2010 Cost 10,011,983 615,303,393 73,041,687 383,040,595 30,833,006 25,284,874 16,803,540 11,355,864 1,165,674,942 Less Accumulated depreciation (181,064) (366,993,368) (33,874,949) (252,813,387) (17,843,769) (19,660,274) (11,375,527) - (702,742,338) Net book amount 9,830,919 248,310,025 39,166,738 130,227,208 12,989,237 5,624,600 5,428,013 11,355,864 462,932,604

Year ended 31 December 2010 Opening net book amount 9,894,018 273,919,354 34,880,078 136,271,205 16,977,069 7,717,601 6,581,961 14,475,800 500,717,086 Additions - 302,695 7,842,232 9,312,410 582,987 - 969,880 18,434,243 37,444,447 Disposals, net - - - (447) - - - - (447) - 7,236,180 3,113,196 10,647,554 557,249 - - (21,554,179) - Reclassification Depreciation charge (63,099) (33,148,204) (6,668,768) (26,003,514) (5,128,068) (2,093,001) (2,123,828) - (75,228,482) Closing net book amount 9,830,919 248,310,025 39,166,738 130,227,208 12,989,237 5,624,600 5,428,013 11,355,864 462,932,604

Year ended 31 January 2010 Cost 10,011,983 607,764,518 62,086,259 363,877,127 29,692,770 25,284,874 15,833,660 14,475,800 1,129,026,991 Less Accumulated depreciation (117,965) (333,845,164) (27,206,181) (227,605,922) (12,715,701) (17,567,273) (9,251,699) - (628,309,905) Net book amount 9,894,018 273,919,354 34,880,078 136,271,205 16,977,069 7,717,601 6,581,961 14,475,800 500,717,086

Land Buildings Building and and land and fitting leasehold improvement equipment improvement

17. Property, plant and equipment (Continued)

122 2011 Annual Report


At 31 December 2011 Cost 10,011,983 618,695,065 95,984,006 404,421,096 74,080,720 39,284,874 17,242,101 2,579,822 1,262,299,667 Less Accumulated depreciation (252,719) (401,203,596) (43,862,815) (280,032,515) (23,235,842) (23,956,669) (12,232,111) - (784,776,267) Net book amount 9,759,264 217,491,469 52,121,191 124,388,581 50,844,878 15,328,205 5,009,990 2,579,822 477,523,400

462,932,604 97,388,824 (93,965) - (82,704,063) 477,523,400

Year ended 31 December 2011 Opening net book amount 9,830,919 248,310,025 39,166,738 130,227,208 12,989,237 5,624,600 5,428,013 11,355,864 Additions - 225,000 1,345,837 8,999,474 1,242,254 14,000,000 293,841 71,282,419 Disposals, net - - - (93,965) - - - - - 3,166,715 21,596,440 13,145,127 42,005,459 - 144,720 (80,058,461) Reclassification Depreciation charge (71,655) (34,210,271) (9,987,823) (27,889,263) (5,392,072) (4,296,395) (856,584) - Closing net book amount 9,759,264 217,491,469 52,121,191 124,388,581 50,844,878 15,328,205 5,009,990 2,579,822

Motor vehicles

Total

Furniture, fixtures and office Other equipment equipment

Company - Baht Operating Construction equipment in progress

Land Buildings Building and and land and fitting leasehold improvement equipment improvement

17. Property, plant and equipment (Continued)

Minor International Public company limited

123


124

2011 Annual Report

During 2002 to 2003, certain subsidiaries have entered into sale and leaseback agreements with the Thai Assets Management Property Fund and Sub Thawee Property Fund with the first right of repurchase. The Property Funds are consolidated in the consolidated financial statements of the Group. The sale and leaseback transactions have been accounted for as secured borrowings (Note 21). There is no accounting entries relating to property, plant and equipment required to record in the consolidated financial statements. As at 31 December 2011, other long-term borrowings (Note 21) are secured by f ixed assets of these subsidiaries with book values of Baht 841 million.

Building included building under sublease agreement for 30 years amounting to Baht 2,527 million.

A subsidiary of the Group has mortgaged building amounting to AUD 21 million or equivalent to Baht 687 million to secure loans with foreign banks (Note 21).

Capital commitments

Consolidated Baht Million

Company AUD Million

Baht Million

Commitments in respect of building renovation contracts and purchases of equipment as at 31 December 2011 145.8 16.0 4.6 Commitments in respect of building renovation contracts and purchases of equipment as at 31 December 2010 39.2 - 18.7 Depreciation expense of Baht 1,021,798,968 (2010: Baht 717,156,317) has been charged in cost of sales and services, Baht 606,114,287 (2010: Baht 542,339,757) in selling expenses and Baht 32,504,298 (2010: Baht 61,846,719) in administrative expenses. The impairment charge of Baht 26 million and the write-off of Baht 3 million for property, plant and equipment was from the disaster of f loods in 2011. Another impairment charge of AUD 0.09 million or equivalent to Baht 3 million was from some the assets in which one of the subsidiaries cannot generate the economic benefits as expected.


Franchise Computer development Initial Computer software under expenses Franchise fees Goodwill Brand Software installation

Consolidated - Baht

Total

At 1 January 2010 Cost 171,569,612 135,881,519 3,400,758,332 560,030,233 176,384,542 171,850,909 4,616,475,147 Less Accumulated amortisation (158,178,566) (92,630,123) (391,808,039) - (89,123,102) - (731,739,830) Less Provision for impairment - - - - (6,305,909) - (6,305,909) Net book amount 13,391,046 43,251,396 3,008,950,293 560,030,233 80,955,531 171,850,909 3,878,429,408 Year ended 31 December 2010 Opening net book amount 13,391,046 43,251,396 3,008,950,293 560,030,233 80,955,531 171,850,909 3,878,429,408 Additions - 3,995,590 - - (83,550,387) 37,374,906 124,920,883 Acquisition from investment in a subsidiary - - 254,158,555 - - - 254,158,555 Write-offs, net (484,914) (93,396) - - (6,065,058) - (6,643,368) Reclassification - - - - 128,338,680 (128,338,680) - Transfer from (to) other account (6,494,218) (34,755) - - 70,340,084 52,781,600 116,592,711 Adjustment to actual costs - - (14,661,334) - - - (14,661,334) Amortisation charge (3,348,850) (4,811,424) - - (51,329,951) - (59,490,225) Reversal of impairment charge - - - - 5,055,779 - 5,055,779 Translation adjustment 136,569 894,132 - - (626,179) - 404,522 Closing net book adjustment 3,199,633 43,201,543 3,248,447,514 560,030,233 310,219,273 133,668,735 4,298,766,931 At 31 December 2010 Cost 164,727,049 140,643,090 3,640,255,553 560,030,233 451,922,456 133,668,735 5,091,247,116 Less Accumulated amortisation (161,527,416) (97,441,547) (391,808,039) - (140,453,053) - (791,230,055) Less Provision for impairment - - - - (1,250,130) - (1,250,130) Net book amount 3,199,633 43,201,543 3,248,447,514 560,030,233 310,219,273 133,668,735 4,298,766,931

18. Intangible assets

Minor International Public company limited

125


Consolidated - Baht Total

A subsidiary of the Group has mortgaged management letting rights amounting to AUD 83 million or equivalent to Baht 2,666 million to secure loans with foreign banks (Note 21).

As at 31 December 2011, the Group has commitments for acquisition of management letting rights amounting to AUD 1.91 million or equivalent to Baht 61.5 million.

At 31 December 2011 Cost 3,197,263,947 16,501,853 164,727,049 144,079,938 4,205,778,093 560,030,233 723,978,225 177,586,809 9,189,946,147 Less Accumulated amortisation (444,790,202) - (161,718,675) (101,934,310) (391,808,039) - (319,617,393) - (1,419,868,619) Less Provision for impairment (86,869,411) - - - (115,808,680) - (1,351,964) - (204,030,055) Net book amount 2,665,604,334 16,501,853 3,008,374 42,145,628 3,698,161,374 560,030,233 403,008,868 177,586,809 7,566,047,473

Year ended 31 December 2011 Opening net book amount - - 3,199,633 43,201,543 3,248,447,514 560,030,233 310,219,273 133,668,735 4,298,766,931 Additions 38,637 - - 3,368,054 - - 41,810,863 114,834,066 160,051,620 Acquisition from investment in a subsidiary (Note 12) 2,683,739,077 16,329,234 - - 645,924,770 - 11,819,716 - 3,357,812,797 Adjustment of fair value of assets from investment in subsidiary - - - - (80,723,201) - - - (80,723,201) Disposals, net - - - - - - (136,568) - (136,568) Write-offs, net - - - - - - (729,241) (323,951) (1,053,192) - - - - - - 112,108,452 (112,108,452) - Reclassification Transfer from (to) other account - - - - - - 4,271,402 41,516,411 45,787,813 Amortisation charge (43,869,558) - (250,538) (4,971,339) - - (77,967,395) - (127,058,830) Impairment charge - - - - (115,808,680) - (101,834) - (115,910,514) Translation adjustment 25,696,178 172,619 59,279 547,370 320,970 - 1,714,200 - 28,510,617 Closing net book amount 2,665,604,334 16,501,853 3,008,374 42,145,628 3,698,161,374 560,030,233 403,008,868 177,586,809 7,566,047,473

Intellectural Franchise Computer Management property development Initial Computer software under letting rights right expenses Franchise fees Goodwill Brand Software installation

18. Intangible assets (Continued)

126 2011 Annual Report


Minor International Public company limited

127

18. Intangible assets (Continued)

Company - Baht

Computer Computer software under software installation

Total

At 1 January 2010 Cost 27,351,688 - 27,351,688 Less Accumulated amortisation (15,506,534) - (15,506,534) Net book amount 11,845,154 - 11,845,154 Year ended 31 December 2010 Opening net book amount 11,845,154 - 11,845,154 Additions 3,462,817 - 3,462,817 Amortisation charge (5,424,377) - (5,424,377) Closing net book amount 9,883,594 - 9,883,594 At 31 December 2010 Cost 30,814,505 - 30,814,505 Less Accumulated amortisation (20,930,911) - (20,930,911) Net book amount 9,883,594 - 9,883,594 Year ended 31 December 2011 Opening net book amount 9,883,594 - 9,883,594 Additions 3,176,267 3,209,296 6,385,563 Write-offs, net (77,280) - (77,280) Amortisation charge (4,500,305) - (4,500,305) Closing net book amount 8,482,276 3,209,296 11,691,572 At 31 December 2011 Cost 33,913,492 3,209,296 37,122,788 Less Accumulated amortisation (25,431,216) - (25,431,216) Net book amount 8,482,276 3,209,296 11,691,572 Amortisation of Baht 63,605,018 (2010: Baht 20,132,363) has been charged in the cost of sales and services; Baht 20,115,932 (2010: Baht 16,643,758) in selling expenses, Baht 43,337,880 (2010: Baht 22,714,104) in administrative expenses.


128

2011 Annual Report

19. Leasehold right

Consolidated Baht

Company Baht

At 1 January 2010 Cost 3,637,148,355 18,690,531 Less Accumulated amortisation (1,673,566,632) (13,083,541) Net book amount 1,963,581,723 5,606,990 Year ended 31 December 2010 Opening net book amount 1,963,581,723 5,606,990 Additions 53,317,885 - Acquisition from investment in subsidiary 9,198,689 - Transfer to other account (20,620,698) - Amortisation charge (123,430,568) (623,017) Translation adjustment (34,288,825) - Closing net book amount 1,847,758,206 4,983,973 At 31 December 2010 Cost 3,646,284,291 18,690,531 Less Accumulated amortisation (1,798,526,085) (13,706,558) Net book amount 1,847,758,206 4,983,973 Year ended 31 December 2011 Opening net book amount 1,847,758,206 4,983,973 Additions 70,444,611 - Write-offs, net (20,127) - Transfer from other account 31,803,447 - Amortisation charge (125,204,832) (623,017) Translation adjustment 16,052,603 - Closing net book amount 1,840,833,908 4,360,956 At 31 December 2011 Cost 3,728,549,255 18,690,531 Less Accumulated amortisation (1,887,715,347) (14,329,575) Net book amount 1,840,833,908 4,360,956 Amortisation of Baht 55,784,697 (2010: Baht 55,878,666) has been charged in the cost of sales and services, Baht 57,068,881 (2010: Baht 55,115,629) in selling expenses, Baht 12,351,254 (2010: Baht 12,436,273) in administrative expenses.


Minor International Public company limited

129

20. Other non-current assets

Consolidated

2011 Baht

2010 Baht

2011 Baht

2010 Baht

73,442,573 685,021,679 187,107,037 209,618,531 1,155,189,820

- 579,317,538 213,736,693 37,852,127 830,906,358

- 7,549,462 39,505,774 - 47,055,236

- 4,473,860 54,930,326 - 59,404,186

Loans to other companies Deposits Deferred charges Others Total other non-current assets

Company

Loans to other companies carry interest at MLR rate.

21. Borrowings

Consolidated

2011 Baht

Company 2010 Baht

2011 Baht

2010 Baht

Current Bank overdrafts 7,133,919 2,048,492 - - Short-term borrowings from banks 1,090,213,600 574,761,249 580,000,000 - Current portion of long-term borrowings Bank borrowings 218,453,609 390,762,409 60,000,000 244,000,000 Debentures 1,840,000,000 1,000,000,000 1,840,000,000 1,000,000,000 Other borrowings 163,710,640 164,260,000 - - Finance lease liabilities 141,235,490 - - - Borrowing from related parties (Note 14) - - 1,549,601,374 1,376,380,033 Total current borrowings 3,460,747,258 2,131,832,150 4,029,601,374 2,620,380,033 Non-current Bank borrowings 5,898,400,380 2,147,253,650 - 1,052,000,000 Debentures 10,360,000,000 9,900,000,000 10,360,000,000 9,900,000,000 Other borrowings 24,900,000 188,610,640 - - Finance lease liabilities 80,061,460 - - - Total non-current borrowings 16,363,361,840 12,235,864,290 10,360,000,000 10,952,000,000 Total borrowings 19,824,109,098 14,367,696,440 14,389,601,374 13,572,380,033


130

2011 Annual Report

Short-term borrowings from banks for the consolidated financial statements include loans denominated in Yuan amounting to Yuan 63,000,000 which carry interest rates at the rates from 6.41% - 7.93% per annum. Short-term borrowings from banks for the Company financial statements carry interest rates at the rates 3.35% and 3.38% per annum. Bank borrowings As at 31 December 2011, long-term bank borrowings in the consolidated f inancial statements totalling Baht 6,117 million comprise: a)

The Company’s unsecured outstanding loan from a local bank of Baht 60 million. The loan carries interest rate of 12 months fixed deposit rate of a local bank plus a margin and is due for repayment in semi-annual installments of Baht 60 million per installment with the f irst repayment from November 2007. The loan is subject to certain conditions which the Company has to comply throughout the loan period.

b)

The Company’s unsecured loan from a foreign bank (Bangkok Branch) of Baht 1,116 million. The loan carries interest rate of THB FIX plus a margin and is due for repayment in 9 semi-annual installments with the f irst repayment from June 2010. The loan is subject to certain conditions which the Company has to comply throughout the loan period.

In the first and second quarter of 2011, the Company fully repaid loans before maturity date of Baht 1,116 million. c)

A subsidiary’s unsecured outstanding loan from a foreign bank (Bangkok Branch) of USD 6.7 million. The loan carries interest rate of LIBOR plus a margin and is due for repayment in 9 semi-annual instalments of USD 2.22 million per installment with the first repayment in May 2009. The loan is subject to certain conditions which the subsidiary has to comply throughout the loan period.

As at 31 December 2011, the Group has outstanding cross currency swap which convert the above loan of USD 6.7 million into of AUD 7.6 million with a fixed interest rate. Moreover, the Group also entered into a foreign currency forward contract to convert the AUD payment obligation into THB which has outstanding balance of Baht 191 million. d)

A subsidiary’s unsecured loan from two local banks of Baht 20 million (total loan facilities of Baht 3,050 million). The loan carries interest rate of MLR less a margin and is due for repayment between 2011 and 2017. The loan is subject to certain conditions which the subsidiary has to comply with throughout the loan period.

During the second quarter of 2011, a subsidiary fully repaid loans of Baht 20 million.


Minor International Public company limited

131

e) A subsidiary’s unsecured loan from local bank of USD 30 million. The loan carries interest rate of 6 months SIBOR plus a margin and due for repayment between 2012 and 2016. The loan is subject to certain conditions which the subsidiary has to comply with throughout the loan period. As at 31 December 2011, the Group has outstanding interest rate swap contracts with a financial institution for the above loan of USD 20 million which converts floated interest rates of SIBOR plus a margin and which is effective from 15 June 2010 to 15 December 2016. f)

A subsidiary’s unsecured loan from two local banks AUD 92.2 million. The loan carries interest rate of LIBOR plus a margin and is due for repayment in 2013 to 2014. The loan is subject to certain conditions which the subsidiary has to comply with throughout the loan period.

g)

A subsidiary’s secured loans from two foreign banks of AUD 60.5 million. The loans carry interest rates of Bank Bill Swap Reference Rate plus a margin and are due for repayment in the limit of AUD 2 million per quarter for 5 years. The loans are subject to certain conditions which the subsidiary has to comply with throughout the loans period and use the subsidiary’s investment properties, building and management letting rights as collateral (Note 16 to 18).

Other borrowings Other borrowings amounting to Baht 189 million represent borrowings by the two property funds as follows: a)

Long-term borrowing of Baht 125 million representing Class A and Class B investment units in the Thai Assets Management Property Fund being held by financial institutions with 10 years maturity until 2013. The unit holders receive interest at fixed rates and MLR less a margin as specified in the Unit Holders Agreement.

Thai Assets Management Property Fund holds sub-lease rights and legal titles in the Group’s property, plant and equipment with a book value of Baht 651 million as collateral. b) Long-term borrowing of Baht 64 million representing Class A investment units in the Sub Thawee Property Fund being units held by financial institutions with 10 years maturity until 2012. The unit holders receive interest at MLR less a margin as specified in the Unit Holders Agreement. Sub Thawee Property Fund holds the sub-lease rights and legal titles in the Group’s property, plant and equipment with a book value of Baht 190 million as collateral.

Debentures

a) Debentures of Baht 2,060 million issued in September 2007 which are unsecured, senior and without a debenture holders’ representative. These debentures have a fixed rate of interest and are due for repayment within 2014.


132

2011 Annual Report

b) Debentures of Baht 1,840 million issued in September 2007 which are unsecured, senior and without a debenture holders’ representative. These debentures have a f ixed rate of interest and are due for repayment within 2012. c) Debentures of Baht 1,000 million issued in October 2008 which are secured senior and without a debenture holders’ representative. These debentures have a fixed rate of interest and were repaid in full during October 2011. d) Debentures of Baht 2,000 million issued in July 2009 which are unsecured, senior and with a debenture holders’ representative. These debentures have a fixed rate of interest and are due for repayment within 2013. e) Debentures of Baht 2,500 million issued in May 2010 which are unsecured, senior and with a debenture holders’ representative. These debentures have a fixed rate of interest due for payment of interest due for payment of interest semi-annually and are due for repayment within 2015. f)

Debentures of Baht 500 million issued in December 2010 which are unsecured, senior and without a debenture holders’ representative. These debentures have a f ixed rate of interest and are due for repayment within 2015.

g) Debentures of Baht 1,000 million issued in December 2010 which are unsecured, senior and with a debenture holders’ representative. These debentures have a fixed rate of interest and are due for repayment within 2017. h) Debentures of Baht 1,500 million issued in March 2011 which are unsecured, senior and with a debenture holders’ representative. These debentures have a fixed rate of interest and are due for repayment within 2018. i)

Debentures of Baht 500 million issued in October 2011 which are unsecured, senior and with a debenture holders’ representative. These debentures have a fixed rate of interest and are due for repayment within 2018.

j)

Debentures of Baht 300 million issued in October 2011 which are unsecured, senior and with a debenture holders’ representative. These debentures have a fixed rate of interest and are due for repayment within 2021.

All of the above debentures have certain terms and conditions of the debentures holders’ rights and contain certain covenants, including the maintenance of a certain debt to equity ratio, and limits on the payment of cash dividends and the disposal and transfer of certain operating assets of the Company which are used in its main operations, etc.


Minor International Public company limited

133

At the annual general meeting of the shareholders of the Company held on 25 April 2008, the shareholders passed a resolution to approve issuance of no more than fifteen-year unsubordinated debentures not exceeding Baht 15,000 million, to be used for working capital, business expansion and/or refinance of existing loans and debentures of the Company. As at 31 December 2011, a total of Baht 9,300 million debentures have been issued under this shareholders’ resolution. At the annual general meeting of the shareholders of the Company held on 1 April 2011, the shareholders passed a resolution to approve issuance of non more than fifteen-year unsubordinated debentures not exceeding Baht 15,000 million to be used for working capital business expansion and/or refinance of existing loans and debentures of the Company. As at 31 December 2011, a total of Baht 15,000 million debentures have not been issued under this shareholders’ resolution. The carrying amounts of long-term bank borrowings and other borrowings as of 31 December 2011 approximate to their fair values.

The carrying amounts and fair values of debentures of the Group as at 31 December are as follows:

Debentures

Carrying amounts 2011 Baht

Fair values 2010 Baht

2011 Baht

2010 Baht

12,200,000,000 10,900,000,000 12,382,350,744 11,166,263,030

The fair values are based on discounted cash flows using discount rates based upon market yield rates which are quoted by The Thai Bond Associates at date of statement of financial position.

The interest rate exposure on the borrowings of the Group and the Company is as follows:

Consolidated 2011 Billion Baht

2010 Billion Baht

Company 2011 Billion Baht

2010 Billion Baht

Borrowings: 13 11 12 10 - at fixed rates 7 3 1 2 - at floating rates Total borrowings 20 14 13 12


134

2011 Annual Report

The effective interest rates at the statement of financial position date were as follows:

Consolidated

2011 %

2010 %

2011 %

2010 %

6.13 4.58

4.97 4.58

3.94 4.58

4.46 4.58

Bank borrowings Debentures

Company

The fair values are based on discounted cash flows using a discount rate based upon the borrowing rate which the management expects would be available to the Group and the company at the statement of financial position date. The carrying amounts of short-term borrowings and lease obligations approximate their fair values.

Maturity of long-term borrowings can be analysed as follows:

Consolidated

2011 Baht

2010 Baht

2011 Baht

2010 Baht

382,164,249 5,923,300,380 - 6,305,464,629

555,022,409 2,034,351,290 301,513,000 2,890,886,699

60,000,000 - - 60,000,000

244,000,000 1,052,000,000 - 1,296,000,000

Next year Between 2 and 5 years After 5 years Total long-term borrowings

Company

Borrowing facilities The Group and the Company have the following undrawn committed long-term borrowing facilities:

31 December 2011 Consolidated Baht Million

AUD Million

Company Baht Million

Floating interest rate - expiring within one year 6,515 23 5,000 - expiring beyond one year 3,000 - 3,000 9,515 23 8,000


Minor International Public company limited

135

31 December 2010 Consolidated Company Baht Million Baht Million

Floating interest rate - expiring within one year 7,030 - expiring beyond one year 1,000 8,030

4,000 1,000 5,000

22. Trade and other payables

Consolidated

2011 Baht

2010 Baht

2011 Baht

2010 Baht

1,265,804,693

1,098,459,466

7,825,829

7,178,698

5,762,571

10,119,928

3,426,684

5,243,140

25,684,882 1,818,974,429 194,578,748 681,559,164 3,992,364,487

5,911,792 957,156,814 234,504,767 655,147,185 2,961,299,952

3,162,137 235,081,559 3,131,522 23,431,172 276,058,903

4,759,857 185,850,703 1,580,944 32,035,919 236,649,261

Trade payables - third parties Trade payables - related parties (Note 14) Amounts due to related parties (Note 14) Accrued expense Account payable - contractor Other payables Total trade and other payables

Company

23. Other current liabilities

Consolidated

2011 Baht

2010 Baht

2011 Baht

2010 Baht

129,390,853 261,660,104 23,768,400

295,581,427 195,432,440 45,226,950

- 6,151,862 -

- 4,702,820 -

5,170,784 94,950,874 365,839,938 880,780,953

58,006,388 - 187,141,770 781,388,975

- - 10,646,041 16,797,903

- - 17,382,159 22,084,979

Sales of residence received in advance Booking deposits Provisions for investments Payable from purchase of investment Provision for onerous contracts Others Total other current liabilities

Company


136

2011 Annual Report

24. Provision for employee benefits

The amounts recognised in the statement of financial position are determined as follows:

Consolidated

2011 Baht

2010 Baht

2011 Baht

2010 Baht

-

-

-

-

154,000,043 (2,613,337)

117,336,321 -

20,976,066 (9,438,377)

18,007,894 -

151,386,706

117,336,321

11,537,689

18,007,894

Present value of funded obligations Present value of unfunded obligations Unrecognised actuarial gains Liability in the statement of financial position

Company

The movement in the defined obligation over the year is as follows:

Consolidated

2011 Baht

2010 Baht

2011 Baht

2010 Baht

117,336,321 23,841,832 2,124,594 (2,613,337)

167,064,547 17,400,620 1,820,706 -

18,007,894 2,559,501 725,111 (9,438,377)

39,130,126 2,450,629 617,719 -

12,355,416 (1,658,120) 151,386,706

- (68,949,552) 117,336,321

- (316,440) 11,537,689

- (24,190,580) 18,007,894

23,841,832 2,124,594 25,966,426

17,400,620 1,820,706 19,221,326

2,559,501 725,111 3,284,612

2,450,629 617,719 3,068,348

At 1 January Current service cost Interest cost Actuarial gains Acquisition from investment in subsidiary Benefits paid At 31 December The amount recognised in income is as follows: Current service cost Interest cost Total (included in staff costs)

Company

Of the total charge, Baht 25,966,426 (2010: Baht 19,221,326) were included in administrative expenses.


Minor International Public company limited

137

The principal actuarial assumptions used were as follows:

Consolidated and Company

2011

2010

Discount rate Inflation rate Retirement age Future salary increases Mortality table

4% 3% 60 3.5% - 9% TMO08

3.5% - 4% 3.5% 60 3% - 9% TMO97

25. Other non-current liabilities

Consolidated

2011 Baht Unearned income Rental deposits Accrued land rental Accrued decommissioning Others Total other non-current liabilities

Company 2010 Restated Baht

2011

2010

Baht

Baht

132,929,268 140,815,981 135,808,985 129,677,318 398,372,385 262,600,651 71,355,189 62,455,059 90,753,911 35,337,965 829,219,738 630,886,974

4,976 505,435 - - 1,876,936 2,387,347

4,046,466 505,435 - - 1,779,024 6,330,925


138

2011 Annual Report

26. Share capital and premium on share capital

As at 1 January 2010 Issue of shares As at 31 December 2010 Issue of shares (Note 27) As at 31 December 2011

Consolidated Number of ordinary shares

Ordinary shares Baht

Share premium Baht

Total Baht

3,246,415,792 15,923,581 3,262,339,373 12,885,207 3,275,224,580

3,246,415,792 15,923,581 3,262,339,373 12,885,207 3,275,224,580

3,065,856,272 67,937,682 3,133,793,954 81,531,962 3,215,325,916

6,312,272,064 83,861,263 6,396,133,327 94,417,169 6,490,550,496

As at 1 January 2010 Issue of shares As at 31 December 2010 Issue of shares (Note 27) As at 31 December 2011

Company Number of ordinary shares

Ordinary shares Baht

Share premium Baht

3,246,415,792 15,923,581 3,262,339,373 12,885,207 3,275,224,580

3,246,415,792 15,923,581 3,262,339,373 12,885,207 3,275,224,580

3,040,203,896 67,937,682 3,108,141,578 81,531,962 3,189,673,540

Total Baht 6,286,619,688 83,861,263 6,370,480,951 94,417,169 6,264,898,120

As at 31 December 2011, the registered shares comprise 3,666,519,673 ordinary shares with par value of Baht 1 per share (2010: 3,677,988,773 shares). The issued and fully paid-up shares comprise 3,275,224,580 ordinary shares (2010: 3,262,339,373 shares). At the annual general meeting of the shareholders of the Company held on 1 April 2011, the shareholders passed resolution to approve the reduction of the Company’s registered capital from Baht 3,677,988,773 to Baht 3,666,519,673 through the elimination of the registered, but unissued of 11,469,100 shares, with a par value of Baht 1 each.


As at 31 December 2010 Decrease during the year Exercise ratio for Issue of ordinary ordinary Outstanding shares shares during Exercise Determined exercising date warrant Expire Exercise per the year price Amount Issued by Allotted to Approval date First exercise Last exercise Unit Unit Unit 1 warrant Share Baht Baht The Company Directors and employees of the Company 15 December 28 Februay 16 January and its subsidiary No. 2 2005 2006 2011 13,983,000 (12,797,000) (1,186,000) 1.12645 1,335,800 2.645 3,533,191 Directors and employees of the Company 14 November 31 January 17 December and its subsidiary No. 3 2007 2008 2012 8,071,887 - (1,679,540) 1.10000 1,847,200 8.918 16,473,380 Directors and employees of the Company 6 March 30 October 21 October and its subsidiary No. 5 2009 2009 2013 54,087,950 - (9,286,300) 1.00000 9,286,300 7.650 71,040,195 Directors and employees of the Company and its subsidiary 6 March 30 June 12 June (MINT - W) 2009 2009 2014 1,936,677 - (413,900) 1.00000 413,900 8.080 3,344,312 Former shareholders 26 April 30 June 18 May (MINT - W4) 2010 2010 2013 325,381,547 - (2,007) 1.00000 2,007 13.000 26,091 Total issue by the Company 403,461,061 (12,797,000) (12,567,747) 12,885,207 94,417,169

325,379,540 378,096,314

1,522,777

44,801,650

6,392,347

-

Outstanding warrnt Unit

As at 31 December 2011

The Group does not recognise warrant compensation costs for the fair value or intrinsic value of the warrant granted in these financial statements (Note 2.23).

The Group had issued warrants to subscribe for ordinary shares to existing shareholders, directors and employees of the Company and its subsidiaries, which have been approved by shareholders’ meeting.

27. Warrants

Minor International Public company limited

139


140

2011 Annual Report

28. Legal reserve

At 1 January Appropriation during the year At 31 December

Consolidated and Company 2011 Baht

2010 Baht

2011 Baht

2010 Baht

367,799,113 - 367,799,113

347,774,113 20,025,000 367,799,113

367,799,113 - 367,799,113

347,774,113 20,025,000 367,799,113

Under the Public Limited Company Act, the Company is required to set aside as a legal reserve at least 5% of its net prof it after accumulated def icit brought forward (if any) until the reserve is not less than 10% of the registered capital of the Company. The reserve is non-distributable. As at 31 December 2011, legal reserve of subsidiaries amounting to Baht 116,788,358 (2010: Baht 113,174,358) have been included in the unappropriated retained earnings of the consolidated financial statements. 29. Other component of equity

Consolidated Remeasuring of Actuarial gains available-for- Translation on employee sale investment adjustment benefits Baht Baht Baht

Total Baht

At 1 January 2010 Revaluation Currency translation difference At 31 December 2010

83,303,224 1,036,981,885 - 1,120,285,109

(228,495,510) - (110,724,177) (339,219,687)

- - - -

(145,192,286) 1,036,981,885 (110,724,177) 781,065,422

At 1 January 2011 Revaluation Transfer due to changing status of investment Actuarial gains Currency translation difference At 31 December 2011

1,120,285,109 21,746,245

(339,219,687) -

- -

781,065,422 21,746,245

(1,053,812,318) - - 88,219,036

- - 75,398,741 (263,820,946)

- (1,053,812,318) 2,613,337 2,613,337 - 75,398,741 2,613,337 (172,988,573)


Minor International Public company limited

141

Company

Remeasuring of Actuarial gains available-for- on employee sales investment benefits Baht Baht At 1 January 2010 Revaluation At 31 December 2010

61,074,606 992,753,630 1,053,828,236

At 1 January 2011 1,053,828,236 Revaluation (2) Transfer due to changing status of investment (1,053,812,318) Actuarial gains - At 31 December 2011 15,916

- - -

Total Baht 61,074,606 992,753,630 1,053,828,236

- 1,053,828,236 - (2) - (1,053,812,318) 9,438,377 9,438,377 9,438,377 9,454,293

30. Other income

Consolidated

2011 Baht

Company 2010 Baht

2011 Baht

2010 Baht

Rental income 21,447,644 17,148,790 39,689,477 38,447,092 Interest income 42,739,709 28,051,380 653,836,566 463,722,120 Subsidy income 48,444,026 57,397,881 - - Premium sales income 110,948,280 130,486,964 - - Management income 27,832,119 18,081,857 - - Sales of raw material to franchises 3,761,217 3,573,970 - - Gain on exchange rate - 3,327,520 - - Freight charges 90,221,975 78,665,670 - - Gain on sales of long-term investment - 29,693,470 - - Gain from fair value adjustment of investments 1,257,036,173 - 1,053,811,504 - Gain on capital returned from subsidiary - - 418,150,898 - Others 245,033,438 283,820,384 22,677,429 11,088,581 Total other income 1,847,464,581 650,247,886 2,188,165,874 513,257,793


142

2011 Annual Report

31. Expenses by nature

The following expenditure items, classified by nature, have been charged in arriving at operating profit:

Consolidated

2011 Baht

Company 2010 Restated Baht

2011

2010

Baht

Baht

Depreciation on investment properties (Note 16) 84,912,079 80,268,600 - - Depreciation on property, plant and equipment (Note 17) 1,660,417,553 1,321,342,793 82,704,063 75,228,482 Impairment of property, plant and equipment (Note 17) 20,437,679 5,768,772 - - Write-off and loss (gain) on disposal of property, plant and equipment 24,938,404 18,645,073 47,890 (113,104) Amortisation of intangible assets (Note 18) 127,058,830 59,490,225 4,500,305 5,424,377 Amortisation of leasehold rights 107,803,838 109,993,121 623,017 623,017 Provision for impairment of trade receivables (Reversal) 7,706,314 4,350,852 (187,901) (29,660) Staff costs 5,006,716,370 4,525,510,648 407,459,832 323,341,943 Damaged inventories and tangible 237,828,024 - - assets from flood Flooding in Thailand The flooding in Thailand impacted the operations of the Group. The retail trading business had some inventories stocked at a third-party warehouse located in Phra Nakhon Si Ayutthaya. A few retail trading outlets had also been closed due to the floods. The restaurant business was experiencing impact from the flooding including the relocation of one main distribution center and the flooding of a few outlets. In our hotel business the f loods had minimum impact on our properties outside Bangkok. Our three Bangkok properties were not flooded; however, the drop in Thai tourism impacted their revenues. Finally, a subsidiary of the Group temporarily suspended its household consumer product manufacturing activities due to the flooding situation in the area. Some of the factory equipment, raw materials, finished goods and office equipment in the aforementioned facility were damaged by the f lood. In all instances highlighted, the Group had the damage from this event approximately of Baht 238 million. Part of the above exposure will be covered by several insurance policies, including Industrial All Risk Insurance and Business Interruption Insurance. The Group will not recognise the insurance recovery until it is virtually certain that the future economic benefits will flow to the Group.


Minor International Public company limited

143

32. Income tax

Consolidated

2011 %

2010 %

2011 %

2010 %

0 - 30

0 - 30

30

25

Income tax rate

Company

Reconciliation of income tax expense and the result of the accounting profit multiplied by the income tax rate of the country where the Group is domiciled are presented as follows: Company financial statements • Revenues which are not subject to income tax, which is mainly dividends income, gain from fair value adjustment of investment in associate and gain on capital returned from subsidiary • Non-deductible tax expenses Consolidated financial statements • Effect of the different tax rates • Free income tax in some countries • Revenues and expenses incurred within the Group which are subject to income tax but are eliminated in preparation of consolidated financial statements • Revenues which are not subject to income tax • Non-deductible tax expenses • Use of accumulated tax losses 33. Earnings per share

Basic earnings per share is calculated by dividing the net profit attributable to shareholders of the Company by the weighted average number of ordinary shares in issue during the year. For the purpose of calculating diluted earnings per share, the weighted average number of ordinary shares in issue is adjusted to assume conversion of all dilutive potential ordinary shares. The Company has warrants in issue (Note 27). A calculation is done to determine the potential number of shares that could have been acquired at market price (determined as the average share price of the Company’s shares during the year) based on the outstanding warrants to determine the number of potential ordinary shares would have been additionally issued. The potential shares are added to the ordinary shares outstanding but no adjustment is made to net profit. For the calculation of the diluted earnings per share, the weighted average number of shares assuming conversion of all dilutive potential ordinary shares as at 31 December 2011 is 17,540,971 shares (2010: 30,763,059 shares).


144

2011 Annual Report

33. Earnings per share (Continued)

Consolidated and Company

For the years ended 31 December

2011 Shares

2010 Shares

Weighted average number of ordinary shares in issue, net Effect of dilutive potential ordinary shares Warrants Dilutive potential ordinary shares Weighted average number of ordinary shares for diluted earnings per share

3,270,879,071

3,255,949,536

17,540,971 17,540,971

30,763,059 30,763,059

3,288,420,042

3,286,712,595

Consolidated

For the years ended 31 December

2011 Baht Net profit attributable to ordinary shareholders of the Company Basic earnings per share Diluted earnings per share

2,880,142,740 0.8805 0.8758

2010 Restated Baht 1,236,458,233 0.3798 0.3762

Company

For the years ended 31 December

2011 Baht

2010 Baht

Net profit attributable to ordinary shareholders of the Company Basic earnings per share Diluted earnings per share

1,899,270,392 0.5807 0.5776

1,517,045,197 0.4659 0.4616


Minor International Public company limited

145

34. Dividend

On 1 April 2011, the annual general meeting of the shareholders of the Company passed a resolution to approve a dividend payment amounting to Baht 0.15 per share (2010: Baht 0.15 per share) to existing shareholders and the shareholders of ordinary shares converted from convertible securities of not exceeding Baht 542.5 million (2010: Baht 490.9 million). The dividend was paid on 28 April 2011. 35. Financial instruments

Financial risk management policies The Group is exposed to normal risks from changes in interest rates and currency exchange rates and from non-performance of contractual obligations by counterparties as well as the tourism industry turnover. The Group does not have policy to use derivative financial instruments for speculative or trading purposes. Liquidity risk The Group controls its liquidity risk by maintaining sufficient cash and cash equivalent by management team in order to support the operations of the Group and reduce the risk occurred from changes in cash flows. Interest rate risk

Interest rate risk is occurred from changes in market interest rates which will affect the results of the Group’s operations and its cash flows. The Group manages liabilities by borrowing with fixed and floating interest rates in accordance with the market situation. However, the interest rates of debentures of the Group are mainly fixed. In order to manage the risk arising from fluctuation in interest rates, the Group uses the derivative financial instruments which mainly are interest rate swaps. Interest rate swaps are entered into to manage exposure to fluctuation in interest rate on specific borrowing.

As at 31 December 2011, the Group has entered into the interest rate swap contracts as follows:

a) Interest rate swap contract for loan from financial institution in USD currency with principal amount of USD 6.7 million, which will swap interest at a float interest rate to a fixed interest rate. The contract will expire on 2 May 2013. b) Interest rate swap contract for loan from financial institution in USD currency with principal amount of USD 10 million, which swap floating interest rate to fixed interest rate. The contract will expire in 2015. c) Interest rate swap contract for loan from financial institution in USD currency with principal amount of USD 10 million, which swap floating interest rate to fixed interest rate. The contract will expire in 2016.


146

2011 Annual Report

d) Interest rate swap contract for loan from financial institution in USD currency with principal amount of AUD 31.5 million, which swap floating interest rate to fixed interest rate. The contract will expire in 2016. Foreign currency risk The Groups’ exposure to foreign currency risk relates primarily to the purchase or sales of goods and service, borrowing and lending in foreign currency and investments in foreign subsidiaries and associates. In order to manage the risk arising from fluctuations in currency exchange rates, the Group uses the derivative, cross currency swap contracts and forward foreign exchange contracts, to manage the risk as follows: Cross currency swap contracts As at 31 December 2011, the Group has entered into cross currency swap contracts to protect risk of loan from financial institution (Note 21) by conversion liabilities from loan in USD currency with outstanding amount of USD 6.7 million, at fixed interest rate computed from USD loan to loan in AUD currency with outstanding amount of AUD 7.6 million at fixed interest rate computed from AUD loan. Moreover, the Group has entered into forward foreign exchange contracts to convert liabilities from loan in AUD currency with outstanding amount of AUD 7.6 million to Baht loan at exchange rate of Baht 26.75 per AUD for the amount of AUD 3.8 million and Baht 22.95 per AUD for the amount of AUD 3.8 million. All above contracts will expire on 2 May 2013. Foreign exchange forward contracts Foreign exchange forward contracts are for managing exposure to fluctuations in foreign currency exchange rates for the purchase of goods. As at 31 December 2011, there was no foreign exchange forwards contract (2010: foreign exchange forward contracts, which the settlement dates on open forward contracts less than 6 months ranged from 1 month to 2 months, the amounts in Baht to be paid and contractual exchange rates for the outstanding contracts are:)

Consolidated

2011 Baht

2010 Baht

USD 722,714 (Baht 30.334 - 32.131/1 USD) AUD 2,896 (Baht 29.15 /1 AUD) EUR 26,571 (Baht 40.031 - 40.06501 /1 EUR) JPY 1,116,750 (Baht 0.37315/1 JPY)

- - - -

21,793,998 88,903 1,061,594 413,792


Minor International Public company limited

147

As at 31 December 2011 and 2010, the Group had outstanding foreign currency trade accounts payable as follows:

Consolidated

2011

2010

USD SGD EUR AUD JPY HKD GBP AED LKR NZD

9,550,499 12,595 142,567 45,486 - 237,397 819 16,071 24,200 3,932

2,856,612 - 157,545 51,218 2,306,070 11,200 - 6,301 - -

Credit risk The Group is exposed to normal credit risk primarily with respect to trade accounts receivable. However, due to the large number of entities comprising the Group’s customer base, the Group does not anticipate material losses from its debt collection. Fair value The fair value of the open cross currency swap contracts and foreign exchange forward contracts for loan as at 31 December 2011 is unfavourable amounting to Baht 531,052 (2010: favourable amounting to Baht 18,663,701). As at 31 December 2011, there was no open foreign exchange forward contracts for the purchase of goods (2010: The fair value of the open foreign exchange forward contracts for the purchase of goods was favourable amounting to Baht 306,412). 36. Commitments

As at 31 December 2011, the Group has commitments as follows:

The Company

• The Company has entered into a franchise agreement with an overseas company. The Company is committed to pay a franchise fee and an international marketing fee based on a percentage of gross room revenues, as specified in the agreement. The agreement will expire in June 2013.


148

2011 Annual Report

The Company has entered into an agreement to lease the land on which its hotel building is built for 30 years, ending in 2018. The Company is committed to pay rental fees at a certain percentage of gross revenue (which is to be increased annually until it reaches a specified rate) or at a minimum rental fees stipulated in the agreement, whichever is higher. As at 31 December 2011, the Company’s future payment commitments according to the minimal rental fees stipulated in the agreement is approximately Baht 35 million.

The Company has entered into rental and service agreements with a subsidiary relating to its opening of restaurant. The Company is committed to pay rental and service fees under the agreements of approximately Baht 11.9 million. In addition, the Company is committed to pay fees for the area used in the sale of food and beverages to this subsidiary, at a percentage of the Company’s food and beverage revenues stipulated in the agreements, ending in 2014.

• The Company has entered into a trademark agreement with a subsidiary. The Company has obligation to pay trademark fee at certain percentages of revenue generated as indicated in the agreement. The agreement is valid for 10 years and will be terminated in 2017. • The Company has entered into a hotel management agreement with a subsidiary who will manage the Company’s hotel. The Company is committed to pay fees at a certain percentage of revenue as stipulated in the agreement. The agreement is valid for 10 years and will be terminated in 2016. •

Under two agreements for technical assistance and the use of trademarks and trade names which the Company has entered into with an overseas company, fees are payable calculated at a percentage of gross sales as specif ied in the agreements. One of them was for four years up to 1998, but is automatically renewed at its expiry date for three times, five years each. The other will be terminated during December 2014.

Subsidiaries

Management and services agreements • A subsidiary has entered into a license and royalty agreement with an overseas company. The subsidiary is committed to pay royalty fees and management hotel fees at the rate, terms and basis as specif ied in the agreement for 20 years up to 2021 and can be renewed at its expiry date for 10 years. •

A subsidiary entered into service agreements with three companies with regards to the hotel operations, whereby the subsidiary has been provided services and granted the license. The subsidiary is to comply with certain conditions stipulated in these agreements and to pay the fees following the rates, terms and bases as specif ied in the agreements. All agreements are effective for the period from September 2006 to June 2024.


Minor International Public company limited

149

A subsidiary has entered into a hotel management agreement with an overseas company including international management and right of trademark use. The subsidiaries are committed to pay fees at a certain percentage of total room revenue as stipulated in the agreement. The agreement will expire in June 2013.

• Under advertising, licensing and restaurant management agreements with overseas companies, a subsidiary is committed to pay fees at a percentage of the gross sales of each restaurant in the hotel as stipulated in the agreements, ending in 2015. •

A subsidiary entered into service agreements with three companies with regards to the hotel operations, whereby the subsidiary has been provided services and granted the license. The subsidiary is to comply with certain conditions stipulated in these agreements and to pay the fees following the rates, terms and bases as specif ied in the agreements. All agreements are effective from January 2006 to December 2017 and are renewable after expiry date for 20 years.

A subsidiary entered into service agreements with three companies with regards to the hotel operations, whereby the subsidiary has been provided services and granted the license. The subsidiary is to comply with certain conditions stipulated in these agreements and to pay the fees following the rates, terms and basis as specif ied in the agreements. All agreements are effective from February 2007 to January 2027 and are renewable after expiry date for another two periods of 20 years and 10 years, respectively.

A subsidiary entered into service agreements with three companies with regards to the hotel operations, whereby the subsidiary has been provided services and granted the license. The subsidiary is to comply with certain conditions stipulated in these agreements and to pay the fees following the rates, terms and basis as specif ied in the agreements. All agreements are effective from 22 December 2005 to 25 June 2013 and are renewable after expiry date for another two periods of 15 years each.

A subsidiary has entered into consulting agreement regarding hotel operation with two companies, whereby the subsidiary has been provided hotel operating and marketing services, right of trademark use, technical knowledge, and other related right. The subsidiary is to comply with certain conditions stipulated in these agreements and to pay the fees following the rates, terms and basis as specif ied in the agreements. All agreements are effective from April 2011 to December 2031.

A subsidiary entered into the service agreements with a company with regards to consultation, installation, repair and maintenance of computer system, computer software and information technology system. The subsidiary is committed to pay the fees following the rates, terms and basis as specified in the agreements. The agreements are for the period of 10 years and effective from December 2007.


150

2011 Annual Report

Rental agreements • Four subsidiaries have entered into separate land lease agreements for periods between 30 to 42 years, effective on 1 August 1982, 8 May 1987, 25 January 1989 and 2 July 1994, respectively. The subsidiaries are committed to pay rental fees at a certain percentage of annual gross revenue (to be increased annually until it reaches a specif ied rate) or at a minimum rent stipulated in the agreement, whichever is higher. As at 31 December 2011, the subsidiaries’ future payment commitments in accordance with the minimal rental fees stipulated in the agreements are approximately Baht 127 million (2010: Baht 140 million). In 2010, a subsidiary has extended land lease agreements for periods of 30 years, effective on 25 January 2019. The subsidiary is committed to pay rental fees at a certain percentage of annual gross revenue (to be increased annually until it reaches a specif ied rate) or at a minimum rent stipulated in the agreement, whichever is higher. As at 31 December 2011, the subsidiary’s future payment commitments in accordance with the minimal rental fees and special remuneration stipulated in the agreements are approximately Baht 1,182 million (2010: Baht 1,232 million). • Under agreements to render services and rental space for operations from other companies, a subsidiary has to pay fees based on its gross sales at the rates stipulated in the agreements ending in 2012. •

A subsidiary has entered into the sublease land agreement of Kihavah Huravlhu Island for 23 years from 23 October 2007 for the construction of a new hotel. As at 31 December 2011, a subsidiary has commitment to pay rental fee as stipulated in the lease agreement approximately of USD 17.5 million.

A subsidiary has entered into lease agreements covering the land where the hotel is situated. Under the lease agreement, the subsidiary has transferred the ownership of the hotel buildings and improvements to the landlord. The subsidiary is committed to pay rental at the rates specified in the lease agreements. The lease agreement are for a period of thirty years up to the year 2013 and are renewable after the expiry date for another two periods of f ifteen years each. As at 31 December 2011, the subsidiary has commitment to pay minimal rental fees as stipulated in the agreement as follows:

Year 2012 2013

Baht Million 9.10 28.72 37.82


Minor International Public company limited

151

• On 3 July 2007, a subsidiary entered into an agreement to construct and lease the land and completed building with the Privy Purse Bureau. Under this agreement, the Privy Purse Bureau agrees and permits the subsidiary to undertake building construction, and the subsidiary agrees to construct a residential and hotel building situated on the land owned by the Privy Purse Bureau. The building construction permit is to be under the name of the Privy Purse Bureau and the ownership of the building and other constructions on this land are to be transferred to the landlord. In addition, the subsidiary is to pay all expenses with respect to the construction of the building until its completion. The construction period is 4 years from the date of receipt of the permit to construct the building from the Bangkok Metropolitan Authority. As the construction of building is completed, the Privy Purse has agreed with the subsidiary to lease the land and building which is constructed for the residential, hotel and related commerce for the period of 30 years as from 1 March 2011. As at 31 December 2011, the subsidiary has commitment to pay land and building rental fee to the Privy Purse Bureau at the rates stipulated in the agreement amounting to Baht 512 million by which the subsidiary has recorded a part of the rental fee as accrued project cost in the statement of f inancial position amounting to Baht 263 million. As at 31 December 2011, the subsidiary has commitments with regard to the agreement as the construction is completed, the subsidiary is obliged to pay a monthly rental fee and related expenses to the Privy Purse Bureau at the rate specif ied in this agreement. The rental payable as from 1 September 2010 to the end of this agreement amounts to approximately Baht 510.4 million. •

One of the subsidiaries has entered into a land rental agreement of which the location is on timeshare residence. The particular subsidiary has a commitment to pay the rental fees as stated in the agreement. The agreement lasts 30 years and will end in January 2039. As at 31 December 2011, the subsidiary has commitment to pay Baht 128 million as stipulated, by which Baht 12 million has been included as accrued project cost in the statement of financial position.

As at 31 December 2011 and 2010, there were lease commitments for the lease and service agreements for restaurant outlets, off ice spaces, shops, motor vehicles, computer equipment, and off ice equipment committed by subsidiaries for the period ranging from 1 year to 30 years payable as follows:

2011 Baht Million

2010 Baht Million

Next year Between 2 and 5 years After 5 years Total

807 1,066 107 1,980

662 638 178 1,478


152

2011 Annual Report

In addition to these sums, restaurant rental fees are payable based on a percentage of either gross or net sales as specified in the relevant agreements. • The Group has entered into lease agreement for period ranging from 5 years to 10 years. As at 31 December 2011, the Group has committed to pay for rental in respect of the agreement as follows: Payment due - within 1 year - between 2 - 5 years - over 5 years Total operating lease commitments

AUD Million 23 63 7 93

Trademark, franchise and license agreements • Four subsidiaries have entered into a number of franchise agreements in order to obtain rights to operate food restaurants. According to the agreements, those subsidiaries must pay franchise fees based on a percentage of sales and must comply with certain terms and conditions. The payments of franchise fees are included in selling expenses. •

During 1999 to 2007, six subsidiaries of distribution and manufacturing business have entered into distribution agreement, franchise agreement and to use trademarks and to receive marketing technical assistance with overseas companies. These agreements have terms of 2 - 10 years and can be renewed unless terminated by either party. The agreements are subject to certain conditions which the subsidiaries have to comply throughout the agreement periods.

• Under a one year license agreement ending in 2008 to operate a theatre with an overseas company on a yearly renewal basis, a subsidiary is committed to pay certain fees as specified in the agreement. The agreement is automatically renewed at its expiry date for one year. • A subsidiary has entered into the license agreement with an overseas company in order to obtain rights to sell the residences. According to the agreement, a subsidiary must pay franchise fees based on a percentage of sales and must comply with certain terms and conditions.


Minor International Public company limited

153

37. Guarantees

Guarantees for the normal courses of business are as follows:

Letters of guarantees issued by bank on behalf of the Group Guarantee given by the Group to financial institution to guarantee for credit facilities

31 December 2011 Baht Million

Consolidated US$ AUD Million Million

224.5

6.9

9.5

4,372.9

116.9

188.0

Yuan Million

63.0

Company Baht US$ Million Million

AUD Million

152.0

-

-

200.0 3,245.1

115.5

188.0

31 December 2010 Consolidated Company Baht US$ Yuan Baht US$ Million Million Million Million Million

Letters of guarantees issued by bank on behalf of the Group 218.7 6.5 126.0 151.6 Guarantee given by the Group to financial institution to guarantee for credit facilities 5,777.9 88.8 200.0 1,600.1

1.9 87.6

38. Provident fund

The Group and permanent employees have jointly registered a provident fund scheme under the Provident Fund Act, B.E. 2530. The fund receives contributions on a monthly basis from both the employees and the Group at the rate of 5% to 7.5% and 5% to 10% respectively of basic salaries. The fund is managed by Kasikorn Asset Management Company Limited, Bangkok Bank Public Company Limited and Tisco Asset Management Company Limited. 39. Post statement of financial position event

On 16 January 2012, a subsidiary of the Group was made the final settlement in relation to the acquisition of The Grand Hotel, Gladstone. Final payment was AUD 11 million or equivalent to Baht 354 million, taking the total purchase price to AUD 12 million or equivalent to Baht 386 million (including a deposit that had originally been paid). Final settlement was funded 100% by the Company.


154

2011 Annual Report

Management Discussion and Analysis Overview 4Q11 and 2011 Performance

Despite the widespread flooding in the North and Central Thailand in October - November 2011, Minor International (“MINT”) proved that yet again, it is resilient to unexpected events and reported the best-ever net profit of Baht 2,880 million in 2011. The outstanding result was attributable to (1) Strong performance of hotel and mixed-use business, as a result of a. Improvement in 2011 occupancies of hotels outside of Bangkok and overseas throughout the year b. Consolidation of newly acquired business, Oaks Hotels & Resorts in Australia (“Oaks”) c. Robust performance of mixed-use businesses, where sales of both residential properties and point-based vacation club exceeded budget amidst economic challenges (2) Steady growth of restaurant business throughout the year, despite the floods in the fourth quarter (3) One-time gain on fair value adjustment of S&P investment Note that even without gain on fair value adjustment of S&P investment and one-time expense, MINT still saw its core net profit improve significantly by 55% in 2011. During 4Q11, MINT recognized additional expenses relating to the flood including financial support to affected employees and write-off charges of damaged inventory and assets, totaling Baht 238 million. The majority of such write-off stemmed from retail trading and contract manufacturing business while hotel & mixed-use and restaurant businesses saw only marginal impact in terms of asset and inventory write-off. MINT’s subsidiary, Minor Corporation, temporarily suspended the production of its household consumer products as its NMT manufacturing facility (“NMT”) in Navanakorn Industrial Estate was shut down due to the severe flooding in the area. Nonetheless, the plant resumed its partial operation in December 2011, ahead of schedule. While there was no physical damage to the Company’s hotel properties, domestic hotels experienced reservation cancellation as travel advisories were issued for Bangkok and many provinces identified as affected by the floods. On the other hand, restaurant business reported an impressive same-store-sales growth of 7% in 4Q11, although at one time, over 120 restaurants were closed primarily because the access to these outlets was flooded. 4Q11 revenues increased by 39% to Baht 7,345 million, despite the major flooding during the period as MINT’s businesses are more diversified, primarily with the consolidation of Oaks’ performance in Australia and the strong contribution from sales of real estate development. MINT’s hotel and restaurant businesses also saw an increase in revenues. Retail trading business, on the other hand, was the most impacted by the flooding and saw loss of revenues from the temporary closure of NMT manufacturing plant.


Minor International Public company limited

155

Revenue contribution from hotel & mixed-use business increased to 53% of total revenue, from 35% in 4Q10. Restaurant business, now the second largest revenue contributor, accounted for 40% while retail trading and contract manufacturing contributed another 7% in 4Q11. Revenue Breakdown Unit: Baht million

4Q11

4Q10

% Chg

Restaurant Services* Hotel & Mixed-Use Retail Trading & Contract Manufacturing Total Revenue**

2,954 3,875 516 7,345

2,704 1,853 739 5,296

9% 109% -30% 39%

* Dividend income from S&P prior to 3Q11 has been restated from hotel to restaurant business unit ** Including share of profit from investments in associates and joint ventures

MINT reported 2011 total revenues of Baht 28,332 million, an increase of 48% from the same period last year. The growth was due to 1) 7-months consolidation of Oaks, 2) revenues from real estate development business, 3) strong performances of all business units and 4) gain on fair value adjustment of S&P investment. In terms of revenue breakdown in 2011, hotel & mixed-use and restaurant businesses accounted for 45% and 41% of total revenues, respectively. Retail trading and contract manufacturing contributed another 10%. Gain on fair value adjustment of S&P investment accounted for the remaining 4%. Revenue Breakdown Unit: Baht million

2011

2010

% Chg

Restaurant Services* Hotel & Mixed-Use Retail Trading & Contract Manufacturing Gain on fair value adjustment of S&P investment Total Revenue**

11,697 12,657 2,923 1,054 28,332

10,540 5,870 2,680 0 19,089

11% 116% 9% N/A 48%

* Dividend income from S&P prior to 3Q11 has been restated from hotel to restaurant business unit ** Including share of profit from investments in associates and joint ventures

In 4Q11, MINT reported EBITDA of Baht 1,369 million, a 30% growth over the same period last year. The increase was due primarily to the strong performances of mixed-use businesses which over-compensated for one-time expenses and loss of business during the flood. As a result, hotel & mixed-use business and restaurant business accounted for 77% and 36% of total EBITDA in 4Q11, respectively. On the other hand, with the 2-months closure of NMT facility and write-off expenses of f looded assets and inventory, retail trading and contract manufacturing incurred negative EBITDA in 4Q11.


156

2011 Annual Report

EBITDA Breakdown Unit: Baht million

4Q11

4Q10

% Chg

Restaurant Services Hotel & Mixed-Use Retail Trading & Contract Manufacturing Total EBITDA EBITDA Margin

492 1,050 -173 1,369 19%

449 553 55 1,056 20%

10% 90% -416% 30%

* Dividend income from S&P prior to 3Q11 has been restated from hotel to restaurant business unit

2011 MINT EBITDA grew by 71% to Baht 6,201 million. Excluding gain on fair value adjustment of S&P investment of Baht 1,054 million and one-time goodwill impairment charge for investment of China business of Baht 93 million in 3Q11, MINT EBITDA still increased by 44%. 2011 hotel and mixed-use EBITDA increased by 91% on the back of the Company’s efforts to expand and diversify its hotel and mixed-use portfolio through acquisition of Oaks and sales of real estate development. Restaurant EBITDA, excluding gain on fair value adjustment of S&P investment and one-time goodwill impairment, increased by 10%, in line with revenue growth. Retail trading and contract manufacturing EBITDA declined by 97% as a result of the write-off related to floods in 4Q11. In 2011, EBITDA contribution of the hotel & mixed-use business increased from 48% to 53%, while restaurant business accounted for 30% of total EBITDA in 2011. The one-time gain on S&P and impairment in China accounted for the remaining 17%. EBITDA Breakdown Unit: Baht million

2011

2010

% Chg

Restaurant Services Hotel & Mixed-Use Retail Trading & Contract Manufacturing Gain on fair value adjustment of S&P investment Goodwill impairment of China business Total EBITDA EBITDA Margin

1,923 3,313 4 1,054 -93 6,201 22%

1,746 1,735 152 0 0 3,633 19%

10% 91% -97% N/A N/A 71%

* Dividend income from S&P prior to 3Q11 has been restated from hotel to restaurant business unit

Despite Baht 238 million additional expenses relating to the f lood, MINT reported net prof it of Baht 472 million in 4Q11, up 9% y-y. However, such expenses took a toll on net profit margin, causing it to decline to 6%. 2011 net profit was Baht 2,880 million, up 133% y-y. Excluding the gain from reclassification of S&P investment and one-time goodwill impairment of China business, 2011 net profit increased by 55% with net profit margin of 7%.


Minor International Public company limited

157

Net Profit Unit: Baht million

4Q11

Total net profit Net Profit Margin

472 6%

2011

2010

% Chg

Total net profit Net Profit Margin

2,880 10%

1,236 6%

133%  

4Q10

% Chg

432 9% 8%

* Dividend income from S&P prior to 3Q11 has been restated from hotel to restaurant business unit Major Developments in 4Q11

Developments Restaurant

Purchased the remaining 30% stake in Thai Express, Singapore • Opened 54 outlets, net: of which, 15 were equity outlets, while the remaining 39 were franchised outlets • Opened the f irst equity Thai Express restaurant in China and f irst franchise Xin Wang restaurant in the Philippines • Opened the sixth outlet of TCC in Pattaya Hotel &

Retail Trading

Successfully rebranded Bangkok Marriott Resort & Spa to Anantara Bangkok Mixed-Use Riverside Resort & Spa • Launched the f irst Avani hotel, Avani Bentota Resort & Spa, formerly known as Hotel Serendib and Serendipity Bentota, in Sri Lanka and later launched Avani Kalutara Resort & Spa, formerly known as Kani Lanka Resort & Spa, in Sri Lanka. • Transferred and recorded 4Q11 revenues for 11% of total sellable area of St. Regis Residence, resulting in full year 2011 recognition of almost 50% of total sellable area • Opened the famous contemporary Japanese restaurant, Zuma, at St. Regis Hotel Bangkok, making it the sixth venue for the global brand. Opened 8 points of sale, following the grand opening of Central Rama 9 in December 2011 • Redefined the focus of retail trading brands and divested the investment in AmorePacific (Laneige cosmetics). The divestment was completed in early January 2012.


158

2011 Annual Report

Segment Performance Restaurant Business

At the end of 2011, MINT’s total restaurants reached 1,257 outlets, comprising 711 equity-owned outlets (57% of total), and 546 franchised outlets (43% of total). Of total, 831 food outlets (66% of total) are in Thailand, while the remaining 426 outlets (34% of total) are located in Australia, New Zealand, China, Middle East, India and several countries in Asia. Fifty seven new outlets were opened in 4Q11, while three outlets were closed. Restaurant Outlets by Owned Equity and Franchise

4Q11

Chg q-q

Chg y-y

Owned Equity - Thailand - Overseas Franchise - Thailand - Overseas Total Outlets

711 616 95 546 215 331 1,257

15 16 (1) 38 16 23 54

26 25 1 83 45 38 109

4Q11

Chg q-q

Chg y-y

The Pizza Company Swensen’s Sizzler Dairy Queen Burger King The Coffee Club* Thai Express Others** Total Outlets

277 267 45 263 27 294 69 15 1,257

16 10 - 11 - 14 3 - 54

29 25 1 20 1 32 (2) 3 109

Restaurant Outlets by Brand

* The Coffee Club group includes Ribs and Rumps ** Others include restaurants at the airport under MINT’s 51% JV, Select Service Partner Brand Performance Analysis

Despite the flood, total system sales (including sales from franchised outlets) increased by 13% y-y in 4Q11, driven by strong same store sales growth of 7% and 109 outlet expansion y-y. Most brands reported strong same store sales growth although some stores were temporarily closed as store accessibility was limited by the floods.


Minor International Public company limited

159

Thai Express group continued to report negative same store sales growth in 4Q11. Although the flagship brand, Thai Express, continued to do well with same store sales of 3% in 4Q11, Xin Wang brand saw negative same store sales growth as the brand recently went through management change. Nevertheless, Xin Wang same store sales is seeing an improving trend in November and December of 2011. It should see further improvement once the new management team settles in. Despite the negative same store sales of -1.6% of Thai Express group for the year 2011, Thai Express still reported healthy net profit of S$8 million. For the year 2011, same store sales and total system sales growths remained strong compared to the same period last year. 2011 same store sales grew 9%, while total system sales grew 14%. Restaurant Business Performance by Brand The Pizza Company Swensen’s Sizzler Dairy Queen Burger King The Coffee Club Thai Express Average

Same Store Sales (% chg y-y) 4Q11 11.3 -0.3 5.0 20.7 16.9 5.5 -3.7 6.5

The Pizza Company Swensen’s Sizzler Dairy Queen Burger King The Coffee Club Thai Express Average

4Q10 8.6 1.7 4.3 11.7 1.4 9.8 1.6 6.8

2011 11.7 3.6 11.8 16.7 21.8 8.8 -1.6 9.0

2010 4.0 2.6 5.7 7.5 3.7 5.7 -5.3 3.7

Total System Sales (% chg y-y) 4Q11 18.2 8.6 8.3 30.8 6.9 13.7 -0.3 12.7

4Q10 11.8 6.0 12.0 16.0 4.5 17.9 1.4 11.8

2011 15.6 11.8 14.5 23.8 17.1 15.8 0.9 14.1

2010 5.9 3.9 15.0 12.5 6.6 16.7 -1.0 9.8

Note: Calculation based on local currency to exclude the impact of foreign exchange Financial Performance Analysis

4Q11 restaurant revenues grew 9% y-y, mainly driven by strong same store sales growth, together with continued outlet expansion. 2011 restaurant revenues, excluding gain on fair value adjustment of S&P investment, grew by 11%. EBITDA margin declined slightly to 16% because of higher personnel and marketing expenses earlier in the year.


160

2011 Annual Report

Revenue Breakdown

Unit: Baht million

4Q11

4Q10

Revenues from Operation* Franchise Fee Total Revenues EBITDA EBITDA Margin (%)

2,859 94 2,954 492 17%

2,622 9% 83 14% 2,704 9% 449 10% 17%

2011

2010

% Chg

Revenues from Operation* Franchise Fee Total Revenues EBITDA (excl. gain on fair value adjustment of S&P investment and goodwill impairment) EBITDA Margin (%)

11,349 348 11,697

10,248 292 10,540

11% 19% 11%

1,923 16%

1,746 17%

10%  

% Chg

* Excludes gain on fair value adjustment of S&P investment, includes share of profit and other income ** Dividend income from S&P prior to 3Q11 has been restated from hotel to restaurant business unit Hotel & Mixed-Use Business Hotel Business

After the consolidation of Oaks, MINT owns twenty eight hotels and manages forty seven hotels and serviced suites in ten countries. Altogether, these properties have 9,821 hotel rooms and serviced suites, including 3,287 that are equity-owned and 6,534 that are purely-managed by the Company and its subsidiary, Oaks. Of total, 3,209 rooms in Thailand accounted for 33%, while the remaining 6,612 rooms or 67% are located in Australia, New Zealand, Maldives, Indonesia, Sri Lanka, Vietnam, Africa, and the Middle East. Hotel Rooms by Owned Equity and Management

4Q11

Chg q-q

Chg y-y

Equity-owned* - Thailand - Overseas Management - Thailand - Overseas** Total Hotel Rooms

3,287 2,371 916 6,534 838 5,696 9,821

-9 -9 - - - - -9

296 218 78 5,411 45 5,366 5,707

* Equity owned includes all hotels which are majority-owned and joint ventures ** Includes both properties with management contracts and service contracts


Minor International Public company limited

161

Hotel Room by Brand

4Q11

Chg q-q

Chg y-y

Anantara* Four Seasons Marriott* Oaks Avani** Others** Total Hotel Rooms

2,355 505 782 5,277 195 707 9,821

407 - -413 - 195 -198 -9

619 - -413 5,277 195 29 5,707

* Bangkok Marriott has been rebranded to Anantara Bangkok Riverside since November 2011 ** Hotel Serendib and Serendipity Bentota and Kani Lanka Resort & Spa have been rebranded to Avani Bentota Resort & Spa and Avani Kalutara Resort & Spa, respectively Hotel Brand Performance Analysis

In 4Q11, Minor Hotel Group’s average occupancy increased by 10% to 68%, primarily as a result of Oaks’ high occupancy of 79%. Although average daily rates (“ADR”) declined by 9%, attributable to lower ADR of Oaks, the higher occupancy more than compensated for the ADR shortfall, resulting in average revenues per available room (“RevPar”) increase of 7% in 4Q11. During the quarter, average occupancy showed an improvement y-y across most brands, except Four Seasons and Others. Four Seasons Bangkok and St. Regis Hotel Bangkok experienced lower occupancies as a result of reservation cancellation caused by concern over the f loods throughout the quarter. Nevertheless, for the full year 2011, all brands reported improvements in average occupancies. In terms of average daily rate (“ADR”), all groups except Anantara, showed an improvement in 4Q11. Some of the hotels which were recently rebranded to Anantara in 4Q11 were still temporarily limited in their abilities to increase room rates, right after the rebranding. Further improvement in room rates at these newly rebranded properties should be more visible in 2012. Hotel Business Performance by Brand Marriott* Anantara* Four Seasons Oaks Others** Average

Occupancy (%) 4Q11 65* 58* 42 79 44 68

4Q10 65 53 55 N/A 55 58

2011 67* 52* 50 79 45 65

2010 63 47 45 N/A 44 52


162

2011 Annual Report

Marriott* Anantara* Four Seasons Oaks Others** Average

ADR (Baht/night) 4Q11 4,029 7,239 9,970 4,880 5,302 5,483

Marriott* Anantara* Four Seasons Oaks Others** Average

4Q10 3,890 7,947 8,176 N/A 3,953 6,015

2011 3,643 6,829 8,660 4,977 4,925 5,385

2010 3,717 7,248 8,338 N/A 5,076 5,695

2011 2,450 3,526 4,325 3,917 2,193 3,479

2010 2,337 3,371 3,735 N/A 2,254 2,976

RevPar (Baht/night) 4Q11 2,614 4,178 4,197 3,856 2,335 3,737

4Q10 2,537 4,212 4,525 N/A 2,184 3,491

* Bangkok Marriott has been rebranded to Anantara Bangkok Riverside since November 2011 ** Others including St. Regis Bangkok, Naladhu Maldives and Harbour View Vietnam Hotel Performance Analysis

MINT’s revenues from hotel operations in 4Q11 doubled due mainly to the consolidation of Oaks, additional revenues from the new hotels and improvement of existing hotels. Similarly, 2011 revenues from hotel operations grew by 88%. Mixed-Use Business & Performance Analysis

MINT’s spa business is operated under Anantara, Mandara and Elemis brands. At the end of 4Q11, MINT owns and manages 36 spas in Thailand, China, Maldives, Tanzania, Jordan, UAE, India, Egypt, Vietnam and recently added Korea. In 4Q11, MINT reported a 9% decline in revenues from spa services to Baht 77 million due to the closure of 3 spas during 2011. However, its revenues in 2011 increased slightly by 1% to Baht 298 million. MINT’s real estate business develops and sells properties in conjunction with the development of some of its hotels. The first project is the Estates Samui, which is adjacent to MINT’s Four Seasons Hotel in Samui, with 14 villas. The second project is St. Regis Residences, with 53 residential units located above St. Regis Hotel Bangkok. Another real estate development operation is MINT’s new point-based vacation club under its own brand, Anantara Vacation Club. The f irst 20 purpose-built properties adjacent to Anantara Bophut, Samui, were completed as the inventory available for sale since December 2010. Another two villas in Phuket and three units in Queenstown, New Zealand were later added as part of Anantara Vacation Club’s inventory in 2011. The two real estate businesses, together with rental income from the Estates Samui, reported sales of Baht 801 million in 4Q11, while only Baht 216 million was recognized in 4Q10 for the first few unit sales of St. Regis Residence Bangkok and some rental income from The Estates Samui. For 2011, sales of real estate development totaled Baht 2,853 million, a significant increase compared to only Baht 236 million in 2010.


Minor International Public company limited

163

Another mixed-use business of MINT is plaza and entertainment business. The company owns and operates three shopping plazas, namely; (1) Royal Garden Pattaya; (2) Turtle Village Shopping Plaza Phuket and (3) Royal Garden Plaza Bangkok. In addition, MINT is the operator of five entertainment outlets, namely (1) Ripley’s Believe It or Not Museum; (2) 4D Moving Theater; (3) Haunted Adventure; (4) Infinity Maze; (5) The Louis Tussaud’s Waxworks; and (6) latest addition, surreal journey Scream in the Dark. In 4Q11, revenues from plaza and entertainment business remained flat at Baht 134 million, while its 2011 revenues increased by 12% y-y to Baht 589 million. Overall Hotel & Mixed-Use Financial Performance Analysis

With Oaks’ revenues of Baht 1,182 million and real estate development revenues of Baht 801 million, MINT’s hotel & mixed-use business reported 4Q11 revenue growth of as much as 109% to Baht 3,875 million. However, EBITDA margin from hotel & mixed-use business declined from 30% in 4Q10 to 27% in 4Q11. The decline was due primarily to the reservation cancellation in 4Q11, especially for hotels in Bangkok, initial operating expenses of two new hotels, Anantara Kihavah in the Maldives which was opened in February 2011 and the St. Regis Bangkok which was opened in April 2011, selling & marketing expenses of Anantara Vacation Club and St. Regis Residence and lower EBITDA margin of Oaks. As a result, 2011 EBITDA margin of hotel & mixed use business also declined to 26% from 30% in 2010. Revenue Breakdown Unit: Baht million

4Q11

4Q10

Hotel operations* Management fee Spa services Plaza & entertainment Real estate development** Total Revenues EBITDA EBITDA Margin (%)

2,736 127 77 134 801 3,875 1,050 27%

1,350 103% 68 86% 85 -9% 133 0% 216 270% 1,853 109% 553 90% 30%

2011

2010

% Chg

Hotel operations* Management fee Spa services Plaza & entertainment Real estate development** Total Revenues EBITDA EBITDA Margin (%)

8,587 330 298 589 2,853 12,657 3,313 26%

4,564 246 296 527 236 5,870 1,735 30%

88% 34% 1% 12% 1107% 116% 91%  

* Includes share of profit and other income ** Includes rental income from the Estate Samui

% Chg


164

2011 Annual Report

Retail Trading and Contract Manufacturing Business

At the end of 2011, MINT had 247 retail trading points of sales, an increase by 8 points of sales from 239 at the end of 3Q11 from the opening of Central Rama 9 in Bangkok. Of total retail trading outlets, 74% are operated under fashion brands such as Esprit, Bossini, GAP and Charles & Keith, while 20% are operated under cosmetics brands such as Red Earth, Bloom and Smashbox. Retail Trading’s Outlet Breakdown

4Q11

Chg q-q

Chg y-y

Fashion Cosmetics Others Total Outlets

183 49 15 247

6 2 - 8

-4 -5 -2 -11

In 4Q11, several retail points of sales were temporarily closed due to the f loods, which limited the accessibility to the stores. In addition, the retail trading business’ average same store sales declined by 12% owing primarily to the deteriorated consumer conf idence. Moreover, contract manufacturing temporarily ceased the operation for 2 months as its facility was f looded. As a result, revenues from manufacturing and retail trading businesses declined by 80% and 4% in 4Q11, respectively. Revenue loss, together with asset and inventory write-off, resulted in the negative EBITDA of Baht 173 million in 4Q11. Nevertheless, on the back of strong 9M11 performance, retail trading and manufacturing revenues in 2011 still increased by 9% and was break-even at EBITDA level. Retail Trading and Contract Manufacturing’s Revenue Breakdown Unit: Baht million

4Q11

Retail Trading Manufacturing Total Revenues EBITDA EBITDA Margin

466 50 516 -173 -33%

2011

2010

Retail Trading Manufacturing Total Revenues EBITDA EBITDA Margin

1,898 1,025 2,923 4 0%

1,593 19% 1,087 -6% 2,680 9% 152 6%

4Q10

% Chg

483 -4% 256 -80% 739 -30% 55 7% % Chg


Minor International Public company limited

165

Balance Sheet & Cash Flows

At the end of 2011, MINT reported total assets of Baht 40,865 million, an increase of Baht 8,066 million from Baht 32,799 million at the end of 2010. The increase was primarily the result of: 1. Baht 5,629 million increase in assets from the consolidation of Oaks and Baht 616 million increase in goodwill arisen from Oaks’ acquisition 2. Baht 1,310 million increase in fixed assets of Anantara Kihavah Resort & Spa, Maldives and St. Regis Hotel and Residence, and 3. Baht 445 million increase in associates and other long-term investment mainly from the additional investment in Serendib Hotels Limited, Sri Lanka of Baht 27 million, additional investment in S&P of Baht 346 million, and the acquisition of 25% stake of Tidal Swell (owner of four properties currently managed by Oaks) in Australia under Oaks of Baht 74 million MINT reported total liabilities of Baht 25,931 million, an increase of Baht 6,888 million from Baht 19,043 million at the end of 2010. The increase was a result of; 1. Baht 3,053 million increase in liabilities from the consolidation of Oaks, and 2. Baht 2,969 million increase in long-term borrowings to finance Oaks’ acquisition, and 3. Baht 2,300 million increase in the issuance of debentures in March and October 2011, netted off with loan prepayment of Baht 1,116 million and debenture repayment of Baht 1,000 million Shareholders’ equity increased by Baht 1,179 million to Baht 14,935 million from Baht 13,756 million at the end of 2010 owing mainly to net profit of Baht 1,826 million (excluding gain on fair value adjustment of S&P investment) and the increased capital from exercise of ESOP warrants of Baht 90 million, netted off with dividend payment of Baht 490 million (net of dividend income) and the reduction in minority interest of Baht 383 million as MINT acquired the remaining 30% stake in Thai Express. For the year 2011, MINT and its subsidiaries reported cash flows from operations of Baht 3,813 million, an increase of Baht 1,276 million y-y. Cash f low paid for investing activities was Baht 6,539 million, due primarily to (1) payments of Baht 2,521 million for the acquisition of Oaks, and additional investments of Baht 402 million in Thai Express, Baht 380 million in S&P, Baht 72 million in Tidal Swell and Baht 58 million in Cyprea Lanka, (2) payments of Baht 2,778 million for projects under development in 1Q11, namely Anantara Kihavah in the Maldives and St. Regis Hotel & Residence and other fixed assets and (3) payment of Baht 156 million for software development to support restaurant and retail trading businesses. The Company reported net cash receipts from f inancing activities of Baht 2,670 million, comprising of (1) net proceeds from borrowings of Baht 3,083 million, primarily from the debenture issuance and increased borrowings to f inance Oaks’ acquisition and (2) net proceeds from the issuance of additional ordinary shares from the exercise of ESOP warrants of Baht 90 million, netted off with (3) dividend payment of Baht 503 million. As a result, MINT’s net cash and cash equivalents decreased by Baht 55 million in 2011.


166

2011 Annual Report

Financial Ratio Analysis

MINT’s gross profit margin declined from 62.3% in 2010 to 61.6% in 2011. The decline was due mainly to real estate development business. Although the business contributes almost Baht 3 billion of sales but it has relatively lower gross profit margin, since most of its costs of sales were construction expenditures. Nevertheless, net profit margin for 2011 increased from 6.5% to 10.2%, owing mainly to the gain on fair value adjustment of S&P investment and improved profitability at net margin level of mixed-use business. Return on equity increased to 20.1% in 2011 from 9.6% in 2010. Return on assets was also up to 7.8% from 4.1%. The increase of both ratios was a result of significantly improved net profit. Current ratio decreased from 1.1 as at 31 December 2010 to 0.9 at the end of 4Q11, primarily from the increase in current portion of long-term debentures. Interest bearing debt/equity increased from 1.0x at the end of 2010 to 1.3x from the consolidation of Oaks’ liabilities as well as increased borrowings to finance Oaks’ acquisition. Interest coverage ratio in 2011, however, increased to 5.5x from 5.4x due mainly to the increased net profit. The above mentioned credit ratios are expected to improve partly on the back of future earnings contribution from Oaks. Financial Ratio Analysis Profitability Ratio

31 Dec 2011

31 Dec 2010

Gross Profit Margin (%) Net Profit Margin (%) Return on Equity (%)

61.58% 10.17% 20.08%

62.30% 6.48% 9.58%

Efficiency Ratio

31 Dec 2011

31 Dec 2010

Return on Assets (%) Collection Period (days)

7.82% 17

4.05% 20

Liquidity Ratio

31 Dec 2011

31 Dec 2010

Current Ratio (x)

0.89

1.13

Leverage & Financial Policy

31 Dec 2011

31 Dec 2010

Interest Bearing Debt/Equity (x) Net Interest Bearing Debt/Equity (x)

1.33 1.25

1.04 0.96

31 Dec 2011

31 Dec 2010

Interest Coverage (x)

5.54

5.44

* Excluding gain on fair value adjustment of S&P investment and one-time goodwill impairment, ROE and ROA would be 13.4% and 5.2%.


Minor International Public company limited

167

Management’s Outlook A Promising 2012

After undergoing one of the worst natural disasters in Thailand’s history, MINT expects 2012 to be even a stronger year. All businesses showed strong signs of recovery in January 2012, e.g. over 70% average occupancy for hotel portfolio, 11% same store sales growth for restaurant business and sales of the f irst Estates Samui residence in three years. As a result, MINT expects 2012 to be one of the best years on the back of the following factors; 1. Organic expansion of current business MINT had one of the strongest first nine-month performances in 2011 prior to the flood. Hotels, restaurants and retail stores were tracking well with the economic expansion and growth in domestic consumption. The flood, unfortunately, temporarily disrupted the growth momentum in the fourth quarter of 2011. However, strong 2011 performance was yet another evidence of MINT’s resiliency to unexpected events. The Company’s businesses quickly recovered after the flood. The company, its people and operating system have become very adaptive and pro-active after facing various crises over the past few years. While other companies had to shut down some of their operations during the flood due to supply shortage, MINT’s hotels and the majority of its restaurants and retail stores continued to satisfy customers with only minimal disruptions, signifying its system is second to none. 2. Continued momentum of real estate development MINT recognized almost three billion Baht of sales from real estate development, equivalent to 10% of 2011 total revenues. Since the off icial opening of St. Regis Residence and Anantara Vacation Club in early 2011, sales momentum of both projects has continuously accelerated on the back of good product development and strong sales and marketing team. In January 2012, MINT sold another residential unit of the Estates Samui, in addition to St. Regis Bangkok. With 50% remaining inventory of both residential projects and more inventory in different destinations awaiting to be added into Anantara Vacation Club, MINT expects the performance of real estate development to remain strong. 3. Better yields from newly start-up businesses 2012 will be the second year of operations for MINT’s new hotels, Anantara Kihavah in the Maldives and St. Regis Hotel in Bangkok. Throughout 2011, the two hotels have built their strong awareness through multiple awards and accomplishment, resulting in increase in occupancies and average room rates. In 2012, the two hotels are expected to bring in positive contribution whereas they contributed losses in 2011. Apart from new equity hotels, MINT’s acquisitions in 2011 include two businesses in Australia; Oaks Hotels & Resorts and Ribs and Rumps restaurants. While Oaks is looking to expand further in the region with additional rooms under new MLR contracts, Ribs and Rumps recently opened its f irst new equity outlet since Sep-2011 acquisition. The new store is now one of the brand’s top performing outlets in Australia.


168

2011 Annual Report

4. Additional source of income from potential new investment Although one of the Company’s objectives in 2012 is strengthening the existing businesses, MINT still looks for new business opportunities for greater diversif ication. The success of Oaks acquisition proves that not only does MINT have the expertise in seeking the right and reasonably priced target, but also in incorporating the new business under one roof leveraging on excellent operational platform and stringent financial discipline.


Minor International Public company limited

169

Connected Transactions

Connected Persons Type of Business Transaction Size

2011

(Million Baht)

Necessity and rationale

1. MJET Limited (MJET) Relationship: MJET provided air chartered Common directors flight services to MINT and its subsidiaries, recorded as other expenses by the following companies: • MINT 14.04 • MFG 9.52 Minor Global Solutions Limited, 2.09 MINT’s subsidiary, provided IT management services to MJET and received monthly service fee, which was based on type and quantity of service. Minor Global Solutions Limited, 0.31 MINT’s subsidiary, leased computer and received monthly rental fee from MJET. Minor Corporation Pcl., MINT’s 0.73 subsidiary, provided management and financial services to MJET and received monthly service fee, which was based on type and quantity of services.

MINT and subsidiaries used air chartered flights for management to visit their project sites. The services were provided at market rates and conditions. Audit Committee had an opinion that the transactions were fair and reasonable. In order to share and maximize the usage of resource, Audit Committee had an opinion that the transaction was fair and reasonable. Minor Global Solutions Limited leased many computers from leasing company, third party. This transaction resulted lower costs. Audit Committee had an opinion that the transaction was fair and reasonable. As Minor Corporation Pcl. had specialized staff in providing management and financial services and in order to share and maximize the usage of resource, Audit Committee had an opinion that the transaction was reasonable.


170

2011 Annual Report

Connected Persons Type of Business Transaction Size

2011

(Million Baht)

Necessity and rationale

2. Maikhao Vacation Villas Limited (MVVL) Relationship: Minor Global Solutions Limited, 0.60 A joint venture holds 50% MINT’s subsidiary, provided by MINT and common accounting services. The fee directors was charged according to the type and amount of services provided.

As Minor Global Solutions Limited had specialized staff in providing consultant and management services and in order to share and maximize the usage of resource, Audit Committee had an opinion that the transaction was reasonable.

3. Select Service Partner Limited (SSP)

Relationship: MFG holds 51% stake and common directors

MINT’s subsidiaries sold their respective products to SSP and recorded sales by the following companies: • MFG 6.97 • Minor DQ Limited 10.11 • Burger (Thailand) Limited 66.10 • Swensen’s (Thai) Limited 1.05

SSP, MINT’s subsidiary sold product at market prices and conditions. Audit Committee had an opinion that the transactions were fair and reasonable.

MFG, MINT’s subsidiary, 1.81 provided management and financial services to SSP and recorded management fee income.

In order to share and maximize the usage of resource, Audit Committee had an opinion that the transaction was fair and reasonable.

MFG, MINT’s subsidiary invests 40.80 in SSP’s securities and received dividend income

Dividend income is normal return for holding of securities. Audit Committee had an opinion that the transaction was fair and reasonable.

4. Eutopia Private Holding Limited (Eutopia)

Relationship: MINT holds indirectly 50% shareholding and common directors.

MINT’s subsidiary – RGR 205.99 International Limited provided long-term loan to Eutopia according to joint venture agreement. The loan has interest rate as agreed by both parties which was determined based on market rate.

The loan was provided according to joint venture agreement and interest was determined based on market rate. Audit Committee had an opinion that the transaction was reasonable.


Minor International Public company limited

Connected Persons Type of Business Transaction Size

2011

(Million Baht)

171

Necessity and rationale

RGR International Limited 8.34 recorded interest income received from Eutopia according to joint venture agreement.

The loan was provided according to joint venture agreement and interest was determined base on market rate. Audit Committee had an opinion that the transaction was reasonable.

Lodging Management (Labuan) 136.56 Limited provided hotel management service to Eutopia and recorded management fee income.

Lodging Management (Labuan) Limited had specialized and experienced staffs in hotel management and sharing the usage of resources. Audit Committee had an opinion that the transaction was fair and reasonable.

In order to share and maximize the usage of resource, Audit Committee had an opinion that the transaction was fair and reasonable.

Minor Global Solutions Limited, 0.90 MINT’s subsidiary provided IT management services to Eutopia and received computer fee which was based on type and quantity of service.

Minor Hotel Group, MINT’s 0.36 subsidiary provided hotel management service to Eutopia and received management fee which was based on type and quantity of service.

Minor Hotel Group had specialized and experienced staffs in hotel management and sharing the usage of resources. Audit Committee had an opinion that the transaction was fair and reasonable.

MINT arranged sources of fund 6.43 services to Eutopia and recorded other income for service charge.

The arranging sources of fund to Eutopia were according to joint venture agreement. Audit Committee had an opinion that the transaction was reasonable.


172

2011 Annual Report

Connected Persons Type of Business Transaction Size

2011

(Million Baht)

Necessity and rationale

5. Harbour View Corporation

Relationship: MINT’s subsidiary – RGR 2.54 MINT holds indirectly International Limited provided 30.39% shareholding long-term loan to Harbour View and common directors. Corporation proportionately to shareholding. The loan agreement has definite interest rate, terms and conditions agreed by both parties where the interest rate was determined based on market rate. RGR International Limited 0.06 recorded interest income received from Harbour View Corporation according to joint venture agreement. Minor Hotel Group Limited 2.67 provided hotel management service to Harbour View Corporation and recorded management fee income. Minor Global Solutions Limited, 0.06 MINT’s subsidiary provided IT management services to Harbour View Corporation and received computer fee which was based on type and quantity of service.

The loan was provided proportionately to percentage of shareholding. Audit Committee had an opinion that the transaction was fair and reasonable.

The loan was provided proportionately to percentage of shareholding. Audit Committee had an opinion that the transaction was fair and reasonable. Minor Hotel Group Limited had specialized and experienced staffs in hotel management and sharing the usage of resources, Audit Committee had an opinion that the transaction was fair and reasonable. In order to share and maximize the usage of resource, Audit Committee had an opinion that the transaction was fair and reasonable.


Minor International Public company limited

Connected Persons Type of Business Transaction Size

2011

(Million Baht)

173

Necessity and rationale

6. Tanzania Tourism and Hospitality Investment Limited

Relationship: MINT indirectly holds 50% shareholding

MINT’s subsidiary – Hospitality 141.30 Investment International Limited provided long-term loan to Tanzania Tourism and Hospitality Investment Limited in accordance with joint venture agreement. The loan agreement has definite interest rate, terms and conditions agreed by both parties.

The loan was provided in accordance with joint venture agreement where term was determined base on market rate. Audit Committee had an opinion that the transaction was fair and reasonable.

Hospitality Investment 3.23 International Limited recorded interest income received from Tanzania Tourism and Hospitality Investment Limited in accordance to joint venture agreement.

The loan was provided in accordance with joint venture agreement where term was determined base on market rate. Audit Committee had an opinion that the transaction was fair and reasonable.

Minor Global Solutions Limited, 0.05 MINT’s subsidiary provided management services to Tanzania Tourism and Hospitality Investment Limited and received management fee which was based on type and quantity of service.

In order to share and maximize the usage of resource, Audit Committee had an opinion that the transaction was fair and reasonable.

7. Zanzibar Tourism and Hospitality Investment Limited

Relationship: MINT indirectly holds 50% shareholding

MINT’s subsidiary – Hospitality 14.94 Investment International Limited provided long-term loan to Zanzibar Tourism and Hospitality Investment Limited in accordance with joint venture agreement. The loan agreement has definite interest rate, terms and conditions agreed by both parties.

The loan was provided in accordance with joint venture agreement where term was determined base on market rate. Audit Committee had an opinion that the transaction was fair and reasonable.


174

2011 Annual Report

Connected Persons Type of Business Transaction Size

2011

(Million Baht)

Necessity and rationale

Hospitality Investment 0.34 International Limited recorded interest income received from Zanzibar Tourism and Hospitality Investment Limited in accordance to joint venture agreement.

The loan was provided in accordance with joint venture agreement where term was determined base on market rate. Audit Committee had an opinion that the transaction was fair and reasonable.

Relationship: MINT’s subsidiary – Hospitality 8.87 MINT indirectly holds Investment International Limited 50% shareholding provided long-term loan to Rocky Hill Limited in accordance with joint venture agreement. The loan agreement has definite interest rate, terms and conditions agreed by both parties. Hospitality Investment 0.11 International Limited recorded interest income received from Rocky Hill Limited in accordance to joint venture agreement.

The loan was provided in accordance with joint venture agreement where term was determined base on market rate. Audit Committee had an opinion that the transaction was fair and reasonable.

8. Rocky Hill Limited

The loan was provided in accordance with joint venture agreement where term was determined base on market rate. Audit Committee had an opinion that the transaction was fair and reasonable.

9. Sand River Eco Camp Limited

Relationship: MINT indirectly holds 50% shareholding

MINT’s subsidiary – Hospitality 51.37 Investment International Limited provided long-term loan to Sand River Eco Camp Limited in accordance with joint venture agreement. The loan agreement has definite interest rate, terms and conditions agreed by both parties.

The loan was provided in accordance with joint venture agreement where term was determined base on market rate. Audit Committee had an opinion that the transaction was fair and reasonable.


Minor International Public company limited

Connected Persons Type of Business Transaction Size

2011

(Million Baht)

Hospitality Investment 0.46 International Limited recorded interest income received from Sand River Eco Camp Limited in accordance to joint venture agreement.

175

Necessity and rationale

The loan was provided in accordance with joint venture agreement where term was determined base on market rate. Audit Committee had an opinion that the transaction was fair and reasonable.

10. Elewana Afrika Limited

Relationship: MINT’s subsidiary – Hospitality 82.37 MINT indirectly holds Investment International Limited 50% shareholding provided long-term loan to Elewana Afrika Limited in accordance with joint venture agreement. The loan agreement has definite interest rate, terms and conditions agreed by both parties. Hospitality Investment 0.50 International Limited recorded interest income received from Elewana Afrika Limited in accordance to joint venture agreement.

The loan was provided in accordance with joint venture agreement where term was determined base on market rate. Audit Committee had an opinion that the transaction was fair and reasonable.

The loan was provided in accordance with joint venture agreement where term was determined base on market rate. Audit Committee had an opinion that the transaction was fair and reasonable.

11. Arabian Spa (Dubai) (LLC)

Relationship: M Spa Venture Limited- MINT’s 6.09 MINT indirectly holds subsidiary provided spa 49% shareholding management to Arabian Spa and common directors. (Dubai) (LLC) and recorded management fee income.

M Spa Venture Limited had specialized and experienced staffs in spa management and sharing the usage of resources, Audit Committee had an opinion that the transaction was fair and reasonable.


176

2011 Annual Report

Connected Persons Type of Business Transaction Size

2011

(Million Baht)

Necessity and rationale

12. Sribhathana Garden Limited

Relationship: MINT provided accounting, 0.90 Common major tax management, financial shareholders services and sales to (Minor Holdings (Thai) Sribhathana Garden Limited Limited) and common and recorded management directors. fee income.

MINT had specialized and experienced staffs in the services mentioned. The resources were shared and utilized to realize maximum benefit. Audit Committee had an opinion that the transaction was fair and reasonable.

The Land lease for hotel operation was normal business transaction. Audit Committee had an opinion that the transaction was fair and reasonable.

Maerim Terrace Resort Limited 13.68 leased Sribhathana Garden Limited’s land as a site to operate Four Seasons Resort Hotel Chiangmai and recorded rental expenses.

Minor Global Solutions Limited, 0.63 MINT’s subsidiary, provided accounting, tax management and financial services to Sribhathana Garden Limited. The fee was charged monthly according to the type and amount of services provided.

As Minor Global Solutions Limited had specialized staff in providing accounting services and in order to share and maximize the usage of resources, Audit Committee had an opinion that the transaction was fair and reasonable and in order to maximize benefit of the Company.

13. Minor Holdings (Thai) Limited (MHT)

Relationship: Major shareholder of MINT holds 16.77% and common directors.

Minor Global Solutions Limited, 1.38 MINT’s subsidiary provided IT management services to MHT and received monthly service fee, which was based on type and quantity of service.

In order to share and maximize the usage of resource, Audit Committee had an opinion that the transaction was fair and reasonable.


Minor International Public company limited

Connected Persons Type of Business Transaction Size

2011

(Million Baht)

Minor Global Solutions Limited, 0.02 MINT’s subsidiary, leased computer and received monthly rental from MHT.

177

Necessity and rationale

Minor Global Solutions Limited leased many computers from leasing company, third party. This transaction resulted lower costs. Audit Committee had an opinion that the transaction was fair and reasonable.

14. Phuket Vessel Holding Limited

Relationship: Common directors.

Minor Global Solutions Limited, 0.25 MINT’s subsidiary provided IT management services to Phuket Vessel Holding Limited and received monthly service fee, which was based on type and quantity of service.

In order to share and maximize the usage of resource, Audit Committee had an opinion that the transaction was fair and reasonable.

Minor Global Solutions Limited, 0.03 MINT’s subsidiary provided IT management services to Pluluang Limited and received monthly service fee, which was based on type and quantity of service.

In order to share and maximize the usage of resource, Audit Committee had an opinion that the transaction was fair and reasonable.

15. Pluluang Limited

Relationship: Common directors.

Rajadamri Residence Ltd. 136.46 MINT’s subsidiary received annual maintenance fee from Pluluang Limited is the purchaser of St. Regis residence. In consideration thereof, the service is the same rate with third parties.

Annual maintenance fee represented fee based on market (the same rate with other customers) and normal condition collecting from purchaser of the residence project of Rajadamri Residence Ltd. Audit Committee had an opinion that the transaction was reasonable.


178

2011 Annual Report

Connected Persons Type of Business Transaction Size

2011

(Million Baht)

Necessity and rationale

16. Hua Hin Condominium Limited

Relationship: Major shareholder of MINT holds 16.77% and Common directors

Minor Global Solutions Limited, 0.06 MINT’s subsidiary provided Legal Management service fee to Hua Hin Condominium Limited and received monthly service fee, which was based on type and quantity of service.

In order to share and maximize the usage of resource, Audit Committee had an opinion that the transaction was fair and reasonable.

Relationship: MINT invested in S&P’s 83.78 MINT holds 31.32%. securities and received and Common directors dividend income MINT’s subsidiaries purchased products from S&P who are producer and distributor of diary products, and frozen foods. The subsidiaries recorded as purchase of goods by following companies: • MFG 32.17 • Swensen’s (Thai) Limited 5.95 • SLRT Limited 7.22 • Minor DQ Limited 3.40 • The Coffee Club (Thailand) 0.02 Limited

Dividend income is normal return for holding of securities. Audit Committee had an opinion that the transaction was fair and reasonable.

17. S&P Syndicate Pcl. (S&P)

The transaction is normal business and purchase price was at market price. Audit Committee had an opinion that the transaction was fair and reasonable.

18. Minor Aircraft Holding Limited

Relationship: Common directors

Minor Global Solutions Limited, 0.44 MINT’s subsidiary, provided IT management services to Minor Aircraft Holding limited and received monthly service fee, which was based on type and quantity of service.

In order to share and maximize the usage of resource, Audit Committee had an opinion that the transaction was fair and reasonable.


Minor International Public company limited

Connected Persons Type of Business Transaction Size

2011

(Million Baht)

Minor Global Solutions Limited, 0.03 MINT’s subsidiary, leased computer and received monthly rental fee from MJET.

179

Necessity and rationale

Minor Global Solutions Limited leased many computers from leasing company, third party. This transaction resulted lower costs. Audit Committee had an opinion that the transaction was fair and reasonable.

19. MJETS Maintenance Limited

Relationship: Minor Global Solutions Limited, 0.37 Common directors MINT’s subsidiary, provided IT management services to MJETS Maintenance Limited and received monthly service fee, which was based on type and quantity of service. Minor Global Solutions Limited, 0.10 MINT’s subsidiary, leased computer and received monthly rental fee from MJETS Maintenance Limited. Minor Corporation Pcl., 0.73 MINT’s subsidiary, provided management and financial services to MJETS Maintenance Limited. and received monthly service fee, which was based on type and quantity of services.

In order to share and maximize the usage of resource, Audit Committee had an opinion that the transaction was fair and reasonable.

Minor Global Solutions Limited leased many computers from leasing company, third party. This transaction resulted lower costs. Audit Committee had an opinion that the transaction was fair and reasonable. As Minor Corporation Pcl. had specialized staff in providing management and financial services and in order to share and maximize the usage of resource, Audit Committee had an opinion that the transaction was reasonable.


180

2011 Annual Report

Connected Persons Type of Business Transaction Size

2011

(Million Baht)

Necessity and rationale

20. Thaisale.co.th Limited

Relationship: Minor Corporation Pcl., MINT’s subsidiary holds 50%

Minor Global Solutions Limited, 0.05 MINT’s subsidiary, provided IT management services to MJETS Maintenance Limited and received monthly service fee, which was based on type and quantity of service.

In order to share and maximize the usage of resource, Audit Committee had an opinion that the transaction was fair and reasonable.

21. The Coffee Club Holdings Pty. Ltd.

Relationship: DFHA, MINT’s subsidiary 73.40 MINT’s subsidiary, invests in SSP’s securities Delicious Food Holdings and received dividend (Australia) holds 50% income

Dividend income is normal return for holding of securities. Audit Committee had an opinion that the transaction was fair and reasonable.

22. InsurExcellence Insurance Brokers Ltd.

Relationship: Common director

MINT and its subsidiaries paid 14.01 insurance premium to InsurExcellence Insurance Brokers Ltd. The price was market prices same as third parties.

It is market price and under normal conditions. Audit Committee had an opinion that the transaction was reasonable and in order to maximize benefit of the Company.


Minor International Public company limited

181

Connected transaction approval procedure

All connected transactions are evaluated by the relevant work units in two respects; firstly, their benefit contribution to the Company, and secondly, they being done on a fair price basis. If necessary, external advisors or experts shall be engaged in order to provide independent opinion on the transactions. The Company then proposes the transactions for internal approval process where directors or employees possess conflict of interest must not participate in approval process. The Company also has its Audit Committee certify the fair value of the connected transactions. In case the transactions fall under the relevant rules and regulations of the Stock Exchange of Thailand, the Company observes that all relevant rules and regulations are being adhered to strictly by the Company as well as its subsidiaries. Future policy on connected transactions

The Audit Committee and the Company will jointly consider and review any connected transactions that may arise in the future to ensure their necessity and fair price basis.

Pricing policies for related party transactions are as follows:

Sales and purchases Sales from real estate development operations Rental income Franchise fee Management income and other income Interest income Rental expenses Management expenses Royalty fee Interest expenses

Pricing policies

Prices normally charged to third parties Prices normally charged to third parties Agreed prices which approximate to prices normally charged to third parties Agreed prices which approximate to prices normally charged to third parties Agreed prices which approximate to prices normally charged to third parties Rate as mutually agreed by shareholders and rate determined with reference to the interest rate quoted by commercial banks Agreed prices which approximate to prices normally charged by third parties Agreed prices which are costs plus administrative expenses Agreed prices which approximate to prices normally charged by third parties Rate determined with reference to the interest rate quoted by commercial banks


182

2011 Annual Report

Nature of Business Minor International Public Company Limited (MINT) is a global company focused on three primary businesses including restaurants, hotels and lifestyle brands distribution. MINT is one of Asia’s largest restaurant companies with over 1,200 outlets operating system wide in 18 countries under The Pizza Company, Swensen’s, Sizzler, Dairy Queen, Burger King, Thai Express, The Coffee Club and Ribs and Rumps brands. MINT is also a hotel owner, operator and investor with a portfolio of 37 hotels and 38 serviced suites under the Anantara, Avani, Oaks, Marriott, Four Seasons, St. Regis, Elewana and Minor International brands in Thailand, Australia, New Zealand, the Maldives, Vietnam, Tanzania, Kenya, the Middle East, Sri Lanka and Indonesia. MINT is one of Thailand’s largest distributors of lifestyle brands focusing primarily on fashion, cosmetics and contract manufacturing. Its brands include Gap, Esprit, Bossini, Charles & Keith, Red Earth, Bloom, Smashbox, Tumi, Zwilling J.A. Henckels and ETL Learning. Revenue Structure

In the year 2011, the Company and its subsidiaries operated in main business segments as follows: (1) Food and Beverage 39.53% (2) Hotel Operation 29.14% (3) Retail and Property Business 1.49% (4) Entertainment Operation 0.52% (5) Spa Services 1.05% (6) Real Estates 9.95% (7) Distribution and Manufacturing 10.33% (8) Management Services 1.16% (9) Other Income 6.82%


Minor International Public company limited

183

Major Events in 2011 January

Opened a purely-managed hotel, Rasananda, on Koh Pha Ngan, with 44 villas. Subsequently, in November rebranded to Anantara Rasananda February • Opened Anantara Kihavah, Maldives, with 78 villas March • Acquired 19.96% of Oaks Hotels and Resorts Ltd., one of Australia’s largest hotel and resort operators • Issued Baht 1,500 million debentures through public offering to institutional and high net worth investors with 7-year tenor at coupon rate of 4.57% per annum • Started Dairy Queen franchise business in Thailand April • Opened the St. Regis Hotel Bangkok, a 224-room hotel • Opened a purely-managed hotel, L’Amien Resort in Mui Ne, Vietnam, with 89 rooms. Subsequently, in November rebranded to Anantara Mui Ne • Opened the first Coffee Club franchised outlet in New Caledonia June • Completed the acquisition of 100% in Oaks Hotels & Resorts Ltd., Australia • Acquired Grand Hotel in Gladstone, Australia through Oaks Hotels & Resorts Ltd. July • Opened the first Pizza Company and Xin Wang franchised outlets in Vietnam • Opened the first Coffee Club franchised outlet in Guangzhou, China September • Invested in Ribs and Rumps, an Australian casual dining steakhouse concept, through The Coffee Club Holding Pty. Ltd. • Opened the first Swensen’s franchised outlet in Philippines • Opened the first Thai Express franchised outlet in Seoul, Korea October • Completed voluntary tender offer for shares of S&P Syndicate Pcl., resulting in an increase in MINT’s shareholding in S&P from 26% to 31% • Issued Baht 800 million unsecured senior debentures through private placement to institutional and high net worth investors, which comprise of Baht 500 million debentures with 7-year tenor at coupon rate of 4.80% per annum and Baht 300 million debentures with 10-year tenor at coupon rate of 5.00% per annum • Opened the first Thai Express outlet in Beijing, China November • Launched a new online shopping club, www.thaisale.co.th • Rebranded Bangkok Marriott Resort & Spa to be Anantara Riverside December • Acquired 25% stake in Tidal Swell Pty. Ltd. through Oaks Hotels and Resorts Ltd. • Acquired additional 30% stake in Thai Express Concept Pte. Ltd. • Opened Zuma Restaurant located at the St. Regis Hotel Bangkok • Opened first Avani property, Avani Bentota Resort and Spa in Sri Lanka •


184

2011 Annual Report

Risk Factors Conducting businesses carries a level of risks and uncertainties. Such risks may lead to fluctuation in revenues, profits, asset values, liquidity, and share price. In addition to the risks stipulated below, there may be other uncertainties that the Company has not addressed or considered prominently. All stakeholders should acknowledge the likelihood of occurrence and carefully consider all other associated factors not limited to general and the specific risks contained in this document. 1. Risk from the Seasonality of the Tourism Industry

One of the Company’s core businesses is hospitality, which rely heavily on number of domestic and foreign tourists. Tourist arrivals are influenced by several unpredictable and uncontrollable external incidents such as terrorism, epidemics, natural disaster, domestic political unrest and global economic recession. These factors not only play a significant role in Thai tourism, but also in other tourist destinations across Asia. The Company’s risk management measures include geographical diversification both domestically and overseas. The variety in hotels’ geographical locations increases the proportion of domestic tourists as well as the diversification of customer base to cover more nationalities in order to avoid over-concentration. In 2011, the Company completed the acquisition of Oaks Hotels and Resorts Limited (“Oaks”), one of the largest hotel and resort operators in Australia, with 38 properties, over 5,000 rooms under management throughout Australia, New Zealand and Dubai. As a result, over half of the Company’s hotel rooms are dispersed across Australia, New Zealand, UAE, the Maldives, Sri Lanka, Vietnam, Kenya, Tanzania and Indonesia. In addition, the Company’s restaurant and retail trading businesses provide appropriate business portfolio as risk diversification, as revenues from restaurant business are more stable. In 2011, revenues contribution from restaurant business accounted for 39.5%, while hotel and spa business was 31.4%, Real estate development contributing 10.0%. The remaining was attributable to 10.3% from retail trading, 2.0% from retail property and entertainment and 6.8% from others. 2. Risk from the Competition in Core Businesses

2.1 Competition in Hospitality Business

Increase in luxury hotel supplies particularly in Bangkok has led to intensive price competition, which may result in pressure on the Company’s revenues and profits. Nevertheless, the Company has established loyal Thai and international clienteles on the back of successful market positioning, management’s expertise and a collection of the world’s renowned hotel brands.


Minor International Public company limited

185

In addition to its own Anantara brand, the Company manages a group of hotels under a franchise license with Marriott. It also hires world-class hoteliers, Four Seasons Hotels & Resorts Asia Pacific Pte. Ltd., and the Hotel Licensing Corporation under the Marriott group and Starwood Asia Pacific Hotels & Resorts Pte. Ltd. to manage its hotels under Four Seasons, JW Marriott and St. Regis. Meanwhile, the Company’s own brand, Anantara, is selected to be a member of Global Hotel Alliance (“GHA”), a collection of upscale and luxury regional hotel brands from across the world. Anantara hotels strive to reflect the culture and traditions of each destination, offering local experiences to the guests. Moreover, having other complimentary businesses, e.g. spa, retail properties & entertainment allows the Company to provide a full range of services.

2.2 Competition in Restaurant Business

Restaurant business is highly competitive due to lower barrier of entry, unlike hospitality business. Nevertheless, intensive capital, effective marketing plans and in-depth expertise are required to successfully develop prominent brands with country-wide coverage. This has enabled the Company to maintain its leading position in terms of market share. In addition, the Company’s diversification in product offerings includes Western concepts, e.g. pizza, steak, hamburger and ice cream and other concepts, e.g. Thai, Chinese, Japanese and coffee. The increased variety in different geographical footprints has better coverage of consumers’ diverse demand, offering greater diversification and growth for the business. 2.3 Competition in Retail Trading Business Retail trading business, which includes the distribution of fashion products and cosmetics, has a fairly competitive environment. The business correlates with domestic consumer confidence, which is driven by various factors including economic expansion, natural disasters, inflation rate, and political instability. However, with the extensive experience of its management, the Company is able to pro-actively adapt its marketing strategies in response to dynamic environments. 3. Risk from New Project Initiation

The Company makes investments in new projects, especially for hotel and residences. Each project development involves a certain risk of fluctuation in investment costs and compliance with any regulations regarding environmental protection and other infrastructure qualifications. With over 30 years of experience, the Company is able to monitor such risk through various conducts and measures. Costs of investment and standard protocols shall be clearly stipulated in the construction agreements signed with contractors. Moreover, prior to the project initiation, an intensive environmental study and infrastructure inspection are carried out to ensure the feasibility and to minimize all possible damages. 4. Risk from Overseas Investments

The Company has several overseas investments including hotels in Australia, New Zealand, the Maldives, Sri Lanka, Vietnam and Africa and restaurants in China, Singapore and Australia. These investments are subject to country risks, which include but are not limited to political, legal, foreign exchange and economic risks. Events related to these risks may be significant in particular countries and may impact revenues and profits from the Company’s foreign investment.


186

2011 Annual Report

The Company is fully aware of such risks, and therefore the management has engaged local industry experts to conduct in-depth analysis, feasibility study and due diligence prior to making any investment decision. In addition, for countries that the Company has no presence, the Company will make initial investments with business partners with local knowledge and expertise to learn the market and business operations. Until the Company is confident with the operations in that particular country will the Company increase its shareholding. This is reflected in the investments in Africa, the Maldives, Sri Lanka and Australia. As at 31 December 2011, the Company’s overseas investment amounted to Baht 7,783 million or 19% of total assets. Furthermore, the Company has expanded its businesses in certain international markets through franchise and hotel management agreements. Such expansion entails minimal investment risks while allowing the Company to expand its customer base through its own brands. As at end of 2011, of total 1,257 restaurant outlets, 546 are franchised, equivalent to 43%, and 47 out of 75 hotels are under management agreement. 5. Risk from Not Owning Land

Some of the Company’s hotel properties are on leased land. The Company has the right to renew the lease agreements, with rental fees to be agreed upon unless the Company voluntarily declines to extend the lease. The Company has been in compliance with all terms and conditions and has maintained excellent relationship with the landlords, and therefore does not foresee such risk arising in the near term. For restaurant and retail trading businesses, securing prime location is one of the key success factors. Risks include the possibility that rent contracts cannot be renewed or terms and conditions may be changed. Nevertheless, the Company’s restaurant and retail trading multi-brands portfolio, enhances its negotiation power, thus allowing it to secure long-term rental agreements. 6. Risk from Renewal of Franchise and Distribution Agreements

Some of the restaurant brands under the Company’s operations are franchised from abroad. There is a risk of contract renewal or changes in terms and conditions of the contracts. To control such risk, the Company requests for renewal well in advance with contract terms of 10 - 20 years (subject to types of agreement). In addition, the Company has a goal to increase the brands under its ownership in addition to the three existing ones, which are The Pizza Company, Thai Express group, The Coffee Club and the recently acquired Ribs and Rumps, in order to mitigate this risk in the future. For retail trading business, securing exclusive distribution agreements is crucial. Two types of agreements are automatic renewal and defined term of maturity. There is a risk on the renewal in case of agreements with defined term of maturity, leading to a possible decline in revenues from retail trading. Nonetheless, its compliance with terms and conditions and its long and established relationship with the manufacturers enable the Company to successfully renew its contracts unless the Company voluntarily declines to extend the lease. In addition, should there be any modifications in the agreements especially on the fee structure, the Company shall negotiate to reach mutual benefits for both parties.


Minor International Public company limited

187

7. Risk from Termination of Hotel Management Contract and Manufacturing Contract

The Company has increasingly leveraged on its own Anantara brand to manage non-own hotels in exchange for management fees. Fee structure can be categorized into two phases; a technical service and advisory fee prior to the hotel opening and the management fee once the hotel commences its operations. The management fee is based on the sharing structure of hotel’s revenues and profits. Generally, the contract term lasts 10 - 20 years. Should the hotel owners terminate the contract prior to maturity, the Company is entitled to cancellation fees. With many years of experience in hotel management, Anantara is known for its adaptation to local culture and is gaining recognition and trust by international travelers. As at 31 December 2011, the Company has entered into 28 hotel management contracts in Thailand and overseas, diversifying the hotel business both in terms of locations and partners. Of 28 hotel management contracts, 9 hotels are in operation, while the remaining are under construction, and are expected to be opened by 2014. One of the Company’s subsidiaries, NMT Ltd., conducts contract manufacturing business for global fast moving consumer goods. While barrier to entry is relatively high due to the limited licensed manufacturers, price and product quality play a prominent role in securing orders. With over 20 years of experience, the Company emphasizes on production quality at the appropriate price. Moreover, consistent improvement of production line enables cost reduction. These result in long-term orders from global and regional customers. 8. Financial Risk

8.1 Risk from Exchange Rate

The Company and its subsidiaries receive revenues, such as to franchise income, hotel management income and income from foreign travel agencies, in foreign currency. These revenues fluctuate according to the exchange rates. However, they are naturally hedged against non-Thai Baht expenses, e.g. hotel management expenses, franchise expenses and costs of retail trading products. Because currently, the revenues and expenses are in approximately the same proportions, the change in exchange rates are insignificant compared to total revenues. The Company and its subsidiaries also reduce the risk exposure by quoting all room rates of domestic hotels in Thai Baht, instead of US currency. As at 31 December 2011, the Company’s foreign investment accounted for 4% of total assets. These include investments in associates and joint ventures as well as long-term investment in marketable securities. They are recorded in compliance with the accounting standards, where exchange rate gain or loss in foreign investments is not realized on the income statement. Share of profits from investments in associates and joint ventures are converted to Thai Baht based on the Bank of Thailand’s published average exchange rate throughout 2011, while investment in marketable securities shall be marked to market based on the exchange rate at the end of accounting period, and reflected in the shareholders’ equity. The affect of foreign currency is minimal as the foreign investment is a very small proportion compared to total assets. As at 31 December 2011, 65.76% of the Company and its subsidiaries’ total liabilities is denominated in Thai baht, while the remaining 34.24% is in foreign currency. The foreign currency loans are overseas subsidiaries’ to match with the currency with the revenues received in that particular country.


188

2011 Annual Report

8.2 Risk from Debt Collection

The Company’s restaurant business carries relatively smaller debt collection risk compared to hotel business given the nature of its cash collection characteristics. Hotel business may be exposed to the risk of receivables collection from travel agencies and other major business partners. However, with diversified clienteles, the Company does not rely on any one group of customers. In the past, the Company has not experienced any significant losses from debt write-offs as credit terms are discretionarily granted to clients who have at least 3 - 5 years of business track record with the Company. For new accounts, the Company sets limited credit lines. These mechanisms enable the Company to effectively manage its receivables as well as track the non-performing ones. As of 31 December 2011, the Company and its subsidiaries reported net accounts receivable of Baht 1,450 million, accounting for 5% of its revenues. Allowance for doubtful accounts is 4.57% of accounts receivable (before allowance for doubtful account). 8.3 Risk from Interest Rate The interest rate risks arise from the volatility of market interest rates, which may have a negative impact to the Company’s cash flow. The Company manages such risks in accordance with its risk management guidelines and policies as well as prevailing financial market condition. As of 31 December 2011, the Company’s fixed rate debt is approximately 71.14% of total debt. The Company’s weighted average cost of debt stood at about 5.17%. Based on the Company’s sensitivity analysis, an increase in interest rate by 100 basis points would result in increase in interest expense to 0.2% of total revenues. 8.4 Risk from the Compliance with the Debt Covenants The Company and its subsidiaries are subject to certain financial covenants imposed by the bond holders and lenders, including maximum Interest Bearing Debt (IBD) to Shareholders’ Equity of 1.75 at the end of each quarter, based on the audited financial statements. The Company is pro-actively ensuring its ability to service all financial obligations and managing credit risks to comply with relevant loan and bond covenants. As of 31 December 2011, the interest bearing debt to shareholders’ equity ratio stood at 1.33. The Company sees the importance of possible impacts arising from the above risks, and therefore has appointed its internal audit department to periodically evaluate all associated risk factors. Each business unit performs self assessment exercise to identify possible risks and cooperates with the internal audit department to analyze the impact and to formulate risk-elimination or mitigation procedures. Follow ups and re-evaluation are conducted on a continuing basis. All risk management disciplines are summarized in the Company’s risk management manual which is reviewed annually.


Minor International Public company limited

189

Good Corporate Governance The Board of Directors (the Board) of Minor International Public Company Limited (the Company) realizes the importance of Good Corporate Governance, a critical for the Company to achieve its long term sustainable growth objectives. The Board has approved the Good Corporate Governance Guidelines (the Guidelines) for all the Company’s business operations and for its directions, management and employees. The Guidelines will be reviewed and modified annually in order to adapt to the changes in business operations, the regulatory environment, and applicable laws. 1. Shareholders’ Right

The Board values the rights of shareholders and defines a policy in the Guidelines to ensure the Equitable Treatment of all Shareholders: 1.1 All statutory rights of shareholders that include, voting right, right to receive dividends, right to sell, buy or transfer shares, right to attend shareholders’ meetings, and right to receive information that is sufficient, timely, and in a form suitable to allow for the formation of decisions

1.2

The rights to elect and remove directors, and to approve the appointment of independent auditors

1.3

The rights to the division in the profits

1.4 The rights to receive board resolution regarding detailed information of the Board resolution, and the Annual General Meeting (AGM) agendas in advance, not less than 30 days prior to the AGM date via the Company’s website 1.5

The rights to receive an invitation notice for the AGM, identifying the date, time and location of the Meeting, detailed information of agenda items, rules and procedures to attend the meeting and issues for consideration. The Company will send the invitation notice to all shareholders in advance, not less than 7 days before the meeting. The Meeting will be held on date, time and location that is convenient to shareholders

1.6 The Company allows shareholders to send their questions to the Company prior to the meeting date via the Company’s website 2. Equitable Treatment of Shareholders

The Board values the importance of Equitable Treatment to Shareholders and has established policies to supervise, protect and promote the shareholders’ rights to ensure that all shareholders will be treated fairly and equally. Furthermore, the policy relating to the Equitable Treatment to Shareholders must be in


190

2011 Annual Report

accordance with the guidelines, rules and regulations of the SET, and the SEC, as well as related laws. The key policies that have been established to ensure the equitable and fair treatment of shareholders are; 2.1 To grant shareholders the opportunity to propose AGM agenda items of the Meeting in advance. The right to propose additional items to the agenda of the AGM, in order to grant the opportunity to pose questions, request explanations, and express their views as appropriated. All criteria required to propose AGM agenda items will be disclosed in the Company’s website. 2.2 To grant all shareholders who cannot vote in person, be ability to vote by proxy 2.2.1 In case shareholders cannot attend the Meeting, the Company has provided 3 proxy forms prescribed by the Department of Commercial Registration, Ministry of Commerce to be used in any shareholders’ meeting in order to facilitate the proxy. The shareholders may select any form of the three provided. 2.2.2 The granter may select the Company’s independent director to facilitate the proxy. The Company has attached the independent director’s profile with the proxy form. 2.3 Equitable Treatment at the AGM 2.3.1 Before commencing the Meeting, the Chairman of the Meeting will explain the voting procedures and vote-counting procedures to shareholders. 2.3.2 The Chairman of the Board, and the Chairman of the Committees will attend the Meeting in order to provide shareholders comments to inquire relevant to the agenda or the Company’s operation. 2.3.3 The Company allows shareholders to elect directors on individual basis. 2.3.4 The Chairman of the Meeting conducts the Meeting in the sequence as given in the agenda, and invitation notification. No additions to the agenda or alteration of sequence of agenda items will be made, except such for appropriated reasons. 2.3.5 In order to ensure the transparency and compliance with auditing standards, the Company use voting cards for all agenda items in AGM. In addition, to permit accurate and timely reporting, the Company uses the automatic system for registration and vote-counting. 2.4

After AGM, the Company will prepare the minutes of the Meeting according to agenda with voting results of each agenda item specifying affirmative, negative and abstention vote counts, plus details of important matters discussed. The minutes of the Meetings will be disclosed in the Company and the SET’s website within 14 days of AGM date.

2.5 Policy and Measures on Inside Information The Company has established an explicit policy and measurement to prevent all directors and management from using inside information for their own interests. Directors and senior management are to notify the Corporate Secretary of every transaction they make regarding the trading of the Company’s securities prior to submitting the Securities Holding Report to the SEC. The Company also prohibits all directors and senior management from trading the Company’s securities in case involving material information or information that would impact the Company’s security price. The Company will inform in writing all directors and senior management to abstain from trading the Company’s securities at least 30 days before interim and fiscal financial information is released to the SET and the SEC.


Minor International Public company limited

191

3. Roles of Stakeholders

The Company realizes the importance of ensuring that all shareholders’ rights are properly observed. Pertinent procedures are carried out in line with the rules and regulations of the SET, the SEC as well as the related laws. Shareholders

The Company is committed to create long-term growth and returns to the shareholders and conducting its business in the transparent manner.

Customers

The Company is committed to continuously develop better quality of goods and services for the benefit and satisfaction of its customers.

Partners

The Company treats all partners fairly in order to achieve mutual benefits.

Creditors

The Company observes all of its obligations to creditors.

Competitors

The Company abides by the framework of fair competition and will not destroy the reputation of competitors through false accusations.

Employees

The Company considers its employees a valuable asset and treats them fairly in regard to work opportunities, remuneration, and quality of working environment. The Company also provides all its employees professional and career development training.

Society and environment

The Company is committed to conduct businesses that benefit the economy and society and quality of environment. The Company has established the Corporate Social Responsibility (CSR) Department to promote the Company’s staff the importance of the CSR objectives to achieve balanced benefits relating to society, the environment, and all stakeholders in harmony with the Company’s sustainable growth objectives.

Stakeholders can request information, or notify any claims, and violations relating to financial reports, internal control system, or business ethics though the Company’s website. The Internal auditor will review these communications and advise the Audit Committee. All claims and violations communication will be protected, and kept in confidence. The Audit Committee will investigate these matters, recommend corrective action (if any) and will address the outstanding concerns to the Board. 4. Disclosure

4.1 Investor Relations The Board stresses for an importance to disclose sufficient, accurate and timely quantitative and qualitative information. Reporting to the Chief Financial Officer, the Investor Relations Manager has developed and established yearly Investor Relation plan, efficient communication processes include


192

2011 Annual Report

critical areas such as the Company’s vision and mission statements, and financial and operational information to shareholders, equity analysts, target investors and fund managers. During the past years, the Company has successfully delivered the Company’s information and positioning messages using a wide range of tools including news releases, conference calls, quarterly presentations, local and international investor roadshows, IR website, Annual Reports, fact sheets and IR materials, and the SET and the SEC announcement. The Company provides a central point of investor contact, Mr. Chaiyapat Paitoon, VP of Strategic Planning.

4.2 Corporate Governance Guidelines

The Board takes a serious interest in the monitoring of Corporate Governance guidelines that are required for long term sustainable growth. These written guidelines are reviewed annually. The guidelines define rights and equitable treatment of shareholders, vision, mission, and principal responsibilities of the Board, business principles, integrity and business control, conflict of interest, CSR guidelines, workplace environment, disclosure, and policies involving stakeholders including customers, and community. The Board also approves the policy on business ethics for employees, and the Company provides secure communications channels for the reporting of behavior which is illegal or in violation of established guidelines.

4.3 Report of the Board of Directors

The Board is responsible for the consolidated financial statements of the Company and its Subsidiaries, and the financial information shown in the Annual Report. The financial statements are prepared utilizing the accounting standards in Thailand, and to ensure the proper disclosure of financial information. The Board has appointed members of the Audit Committee which comprising of independent directors to be responsible for the oversight of financial reporting and internal control. The opinion Report of the Audit Committee is shown in the Annual Report.

4.4 Remuneration of Directors and Management

The Company sets the remuneration basis of directors and senior management based on relevant industry practices in order to maintain its competitiveness to attract and retain key personnel. The remuneration forms for directors are meeting fees and fixed fees, whereas remuneration forms for senior management are salary and bonuses. In addition, the Company has provided the management and employees ESOP warrants, Employee Joint Investment Program (EJIP) with vesting terms of up to 4 - 5 years in order to motivate management to create the long-term growth, and to facilitate the retention of key personnel. The Compensation Committee, which is comprised of the independent directors and non-executive director, will approve the salaries and bonuses of executive directors, and determine the allocations under the ESOP and EJIP program.


Minor International Public company limited

193

The year 2011 remuneration that the Company has paid to the directors and senior management was as follows: 4.4.1 Directors’ Remuneration Directors

Attendance/ Board

Meetings

1. Mr. William E. Heinecke 2. Mr. Paul C. Kenny 3. Mrs. Pratana Mongkolkul 4. Mr. Kenneth L. White 5. Mr. Weerawong Chittmittrapap* 6. Mr. Anil Thadani 7. Khunying Jada Wattanasiritham 8. Mr. Emmanuel Jude Dillipraj Rajakarier 9. Ms. Chantana Sukumanont

AC

CC

NCG

Fee from Total

fees

fees

fees

fees

Subsidiaries

(Baht)

(Baht)

(Baht)

(Baht)

(Baht)

(Baht)

7/9 9/9 8/9 9/9 7/7 6/9 9/9 8/9

200,000 - 200,000 - 200,000 - 1,100,000 500,000 830,000 - 1,040,000 - 1,100,000 300,000 200,000 -

- - - 50,000 50,000 50,000 - -

- - - 50,000 50,000 50,000 - -

180,000 380,000 - 200,000 180,000 380,000 - 1,700,000 - 930,000 180,000 1,320,000 - 1,400,000 180,000 380,000

8/9

1,080,000 260,000

-

-

- 1,340,000

* Appointed on 22 February 2011. Notes: AC = Audit Committee CC = Compensation Committee NCG = Nominating and Corporate Governance Committee

4.4.2 Management Remuneration In 2011, the Company paid remuneration of totally Baht 148 Million.

4.5 Committee’s Functions The Board has set and appointed members of the Audit Committee, the Compensation Committee and the Nominating and Corporate Governance Committee Compositions of each committee are laid out in the shareholders’ structure and management section.

4.5.1 Summary of the Committees’ Meeting Attendance

Directors

Attendance / Audit

Attendance / Compensation

Attendance / NCG

Committee Meetings

Committee Meetings

Committee Meetings

5/5 5/5 4/5 - -

1/1 - - 0/1 0/1

2/2 1/2 1/2

1. Mr. Kenneth L. White 2. Khunying Jada Wattanasiritham 3. Ms. Chantana Sukumanont 4. Mr. Weerawong Chittmittrapap* 5. Mr. Anil Thadani * Appointed on 22 February 2011.


194

2011 Annual Report

4.6 Policy on Corporate Social Responsibilities The Board realizes the importance for the Company to demonstrate leadership by conducting its business in a manner that provides benefits to the economy, society, and the environment. The Company established the Corporate Social Responsibility Department to promote the Company’s staff the importance of the CSR objectives to achieve balance benefits to society, environment, and all stakeholders in harmony with the Company’s sustainable growth objectives. During 2011, the CSR activities are detailed in Corporate Social Responsibilities Section. 5. Responsibilities of the Board

5.1 The Composition of the Board and Committees 5.1.1 Composition and Qualification of Directors 5.1.1.1 The Board consists of at least five members, but not more than eleven. No fewer than half of these board members must be based within the Kingdom. The board members must have the qualifications determined by the Public Company Limited Act, and related laws. 5.1.1.2 There are at least three independent directors, and not less than one-third of the Board size. All independent directors must have the qualifications under the Company’s independent director definition, the SEC Announcement and the SET Notification. 5.1.1.3 Directors must possess knowledge, capabilities and experience which can benefit the Company’s business operations. Nominating and Corporate Governance Committee will consider the qualifications of the director candidates through transparent pre-selection procedures and propose to the Board for final consideration. The director candidates who are selected by the Board will be included in AGM agenda. All director candidates’ information will be disclosed in the Annual Report and the Company’s website. 5.1.1.4 The Company’s director must not serve on more than five boards of Thai listed public companies. 5.1.2 Balance of Power for Directors The Board comprises of 9 persons, with 5 non-executive directors, representing more than 50% of the board size. 5.1.3 Aggregation or Segregation of Positions The Chairman of the Board and the Chief Executive Officer is the same person and is not independent. The current board structure maintains an appropriate check and balance system because the composition of the Board comprises a majority of members who are non-executive directors. 5.1.4 The Committees The Board has established three committees which are Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee.


Minor International Public company limited

5.1.4.1 5.1.4.2 5.1.4.3

195

Audit Committee comprises of a minimum of three independent directors. All members must be independent directors under the Company’s definition, the SEC Announcement and the SET Notification. Compensation Committee and Nominating and Corporate Governance Committee comprises of a membership majority of independent directors. The Chairman and member of all committees must not be the Chairman of the Board.

5.1.5 Corporate Secretary The Company has assigned the Corporate Secretary to be in charge of the following responsibilities; 5.1.5.1 Prepare and file Board and Shareholder documents which are the directors’ share registration records, notices of Board and Shareholders, minutes of Board and Shareholders, and the Company’s Annual Report and quarterly financial reports 5.1.5.2 File reports relative to the conflict of interest of directors and management 5.1.5.3 Advise the rules and regulations relative to the director’s functions and responsibilities 5.1.5.4 Administer other activities as directed 5.2 Roles, duties and responsibilities of the Board 5.2.1 Leadership and Vision Directors that made up the Company Board participate in defining goals, vision, strategies, and business targets. Through the collective skills and experience of directors, shareholders are assured that the Company’s objectives can be achieved in a manner that best benefit to the Company and its shareholders. 5.2.2 Segregation of Roles, duties and responsibilities between the Board and management The Board and Management have clearly segregated roles, duties and responsibilities. The Board will consider and approve the policies such as vision, mission, strategies, Corporate Governance guidelines, and overall financial objectives, whereas management will manage the business operation under policies defined by the Board. Roles, duties and responsibilities between the Board and Management are detailed in Shareholder’s structure and management Section. 5.2.3 Policy on Corporate Governance The Board takes a serious interest and fully supports the Corporate Governance principles and practices through written guidelines in all operations within the Company and its affiliated companies. The Company also issued a Code of Conduct policy for all employees to serve as a guideline for adherence to operating procedure, and provides the communication channels to receive and process reports relative to illegal conduct and/or misconduct. The Board has assigned the NCG Committee to supervise directors, management and employees to perform their duties under the Guidelines. The NCG Committee will review the Guidelines annually, in order to respond to changing situations and the guidelines of the SET, the SEC and other organizations prescribing corporate best practices.


196

2011 Annual Report

5.2.4 Policy on Conflict of Interest In order to avoid any conflicts of interest, the management and the Board need to carefully consider any and all transactions that may cause potential conflicts by establishing a written policy and approval process for any connected transactions. For any transactions that are related to any director of the Company, that particular director does not have the right to vote or participate in the Board discussion on such transactions. The Board also has established a policy that prohibits management and staff from utilizing the Company’s information for personal use. 5.2.5 Internal Control System The Company stresses the importance of strong internal control throughout the organization. Written responsibilities, authority delegation, and management controls have been adopted to create transparency for utilization of the Company’s resources, and to distinguish the duties of staff and controllers in order to ensure that proper verification and monitoring processes are in place. The Company has an Internal Audit Department to verify and balance the management control process. Internal Audit Department reports directly to the Audit Committee in order to ensure tasks and financial activities are performed according to the guidelines and that the Company is compliant with all regulations. 5.2.6 Risk Management System Certain aspects of its business operation may expose the Company to both internal and external risks. The Company recognizes the importance of controlling these risks and minimizing the possibility of any negative impact to the Company. The Company has assigned Internal Audit Department to assess and monitor these risks. In assessing risks, every department has to identify risk factors that may arise from its operations such as risks from business production, management, and finance. The Internal Audit Department and other departments that identify risk factors, cooperate to collect information and assess risk exposure in order to take action to prevent or minimize the negative impacts. The Company has established a risk management procedural manual and reviews it annually. 5.2.7 Board of Directors’ Meeting To ensure attendance at the Board meetings, Corporate Secretary has provided and informed directors schedule meetings for the year 2011 in advance. Directors can propose the agenda items to the Chairman of the Board (CEO). The Corporate Secretary will send Board notices with the agenda to all directors at least seven days before the meeting. For the year 2011, there are a total of 9 Board meetings. The Corporate Secretary sent notices to the Board at least 7 days before the Meetings. The Chairman of the board fully attended all 9 board meetings. During the Meetings, the Chairman of the Board appropriately allocated time for directors to carefully review and discuss all relative information. There were also written minutes that were made available for verification and approved by the Board. In addition, the Company continuously sends the monthly performance summary to the Board. For the year 2012, the Company will follow the aforesaid meeting procedures.


Minor International Public company limited

197

5.3 Board of Directors’ Self Assessment The Board conducts annual self assessments to determine how well the Board performs its duties and acts accordingly to continuously improve its performance. 5.4 Board and Management Development 5.4.1 Board and Management Training The Company encourages and facilitates training and self development for all directors and management in relation to the Company’s business operation and strategies, and Corporate Governance Guidelines. New directors are provided with orientation programs as well as handbooks that cover roles, authorities and responsibilities of directors, Corporate Governance policies, memorandum of associations, articles of associations, the Company’s vision, mission, and framework of business operations. New directors also attended meetings in regards of strategic plan formulation. 5.4.2 Succession Plan The Board will annually approve and maintain a Succession Plan for the CEO and management.


198

2011 Annual Report

Shareholders’ Structure and Management The Board structure consists of the Board of Directors, the Audit Committee, the Compensation Committee and the Nominating and Corporate Governance Committee BOARD OF DIRECTORS

On 31 December 2011, the Board of Directors comprised of 9 directors as follows: 1. Mr. William E. Heinecke Positions

• Age • Educational Credential • • • Other Current Positions • • • • • • • Experiences • • • % of Shareholding as of • 31 December 2011 • •

Chairman (Elected in 1979) Chief Executive Officer 63 years (Born in 1949) Honorable Doctoral Degree of Business Administration in Management, Yonok College International School of Bangkok Director Certificate Program, Thai Institute of Directors Association Chairman of Minor International Pcl.’s subsidiaries Chairman of Minor Corporation Pcl. and its subsidiaries Chairman of the Minor Food Group Pcl. and its subsidiaries Director of Rajadamri Hotel Pcl. and Director of its subsidiaries Director of Sermsuk Pcl. Independent Director of Indorama Ventures Pcl. Director of Everest Worldwide Ltd. Director of S&P Syndicate Pcl. Director of Saatchi & Saatchi Limited Chairman and Managing Director of Ogilvy & Mather (Thailand) Limited MINT: 362,841,622 shares or 11.1% of paid up shares MINT-W4: 22,334,191 units

2. Mr. Paul Charles Kenny

Positions

Director (Elected in 1997) Age • 63 years (Born in 1949) Education • General Management Program, Ashridge Management College, England • Director Certificate Program, Thai Institute of Directors Association Other Current Positions • Chief Executive Officer and Director of The Minor Food Group Pcl. and Directors of its subsidiaries % of Shareholding as of • MINT: 6,171,078 shares or 0.19% of paid up shares 31 December 2011 • MINT-W4: 434,627 units •


Minor International Public company limited

199

3. Mrs. Pratana Mongkolkul*

• Age • Educational Credential • • • • • • • Other Current Positions • • • • • Experiences • • • • • • % of Shareholding as of • 31 December 2011 • Positions

Director (Elected in 1998) Group Chief Financial Officer (Resigned January 1, 2012) 48 years (Born in 1964) Master of Business Administration, Thammasat University Director Diploma Examination, The Australian Institute of Directors Association Director Certification Program, Thai Institute of Directors Association Directors Accreditation Program (DAP), Thai Institute of Directors Association Chief Financial Officer Certification Program 1, The Institute of Certified Accounting and Auditors of Thailand Capital Market Academy Leader Program 6/2008, Capital Market Academy Advanced Management Program 180, Harvard Business School Director of S&P Syndicate Pcl. Director of Minor International Pcl.’s subsidiaries Director of Minor Corporation Pcl. and its subsidiaries Director of The Minor Food Group Pcl. and its subsidiaries Director of Rajadamri Hotel Pcl. and its subsidiaries President of Thai Investor Relations Club Chairman of the Audit Committee and Independent Director of Thoresen Thai Agencies Pcl. Senior Vice President of Central Pattana Pcl. Vice President of Finance and Accounting of Central Pattana Pcl. Finance and Accounting Manager of Thai Airport Ground Service Co., Ltd. Chief Finance Section of USAID, Thailand MINT: 12,411,431 shares or 0.38% of paid up shares MINT-W4: 1,421,594 units

4. Mr. Kenneth Lee White

• • • Age • Educational Credential • • Other Current Positions • • • • • Positions

Independent Director (Elected in 1998) Chairman of the Audit Committee Chairman of the Compensation Committee Member of the Nomination and Corporate Governance Committee 65 years (Born in 1946) Master of Business Administration, University of Puget Sound Director Certification Program, Thai Institute of Directors Association, Fellow Member IOD Managing Director of Pacific Siam Strategic Consulting Co., Ltd. Director of Finansa Pcl. Director of Finansa Asset Management Limited Director and Audit Committee Member of Goodyear Pcl. Past Governor of the American Chamber of Commerce


200

2011 Annual Report

Experiences % of Shareholding as of 31 December 2011

General Manager of The Chase Manhattan Bank N.A. • MINT: 69,114 shares or 0.00% of paid up shares • MINT-W4: 6,911 units •

5. Mr. Weerawong Chittmittrapap

• • Age • Educational Credential • • • Other Current Positions • • • • • • • % of Shareholding as of • 31 December 2011 • Positions

Independent Director (Elected in 2011) Chairman of the Nomination and Corporate Governance Committee Member of the Compensating Committee 54 years (Born in 1957) LL.M., University of Pennsylvania, USA LL.B., Chulalongkorn University, Thailand Director Certification Program, Thai Institute of Directors Association Chairman, Weerawong, Chinnavat & Peangpanor Ltd. Director and Member of Audit Committee, Thai Airways International Pcl. Director, Nok Airlines Co., Ltd. Director, National Power Supply Pcl. Director and Member of Audit Committee, SCB Life Assurance Pcl. Independent Director and Member of Audit Committee, GMM Grammy Pcl. Director and Member of Audit Committee, Berli Jucker Pcl. MINT: - None MINT-W4: - None -

6. Mr. Anil Thadani

• • Age • Educational Credential • • Other Current Positions • • • • • % of Shareholding as of • 31 December 2011 • Positions

Director (Elected in 1998) Member of Nominating and Corporate Governance Committee Member of the Compensation Committee 65 years (Born in 1946) Master of Business Administration, University of California, Berkeley, USA Master of Science, University of Wisconsin, Madison, USA Director of Rajadamri Hotel Pcl. Founder and Chairman of Symphony Capital Partners Limited and Symphony Investment Managers Limited Director of Symphony International Holdings Ltd. (listed on London Stock Exchange) Member of Board of Trustees of the Singapore Management University Member of International Institute for Strategic Studies MINT: 57,688,866 shares or 1.76% of paid up shares MINT-W4: 5,555,157 units


Minor International Public company limited

201

7. Khunying Jada Wattanasiritham

Independent Director (Elected in 2008) • Member of the Audit Committee Age • 67 years (Born in 1945) Educational Credential • M.A. Economic Development, Williams College, Massachusetts • M.A. Natural Sciences & Economics, Cambridge University • B.A. Natural Sciences & Economics, Cambridge University Other Current Positions • Independent Director and Member of the Corporate Social Responsibility Committee and Member of the Nomination, Compensation and Corporate Governance Committee, The Siam Commercial Bank, Pcl. • Chairman of Siam Commercial Insurance Pcl. • Chairman of Siam Commercial Samaggi Insurance Pcl. • Chairman of Siam Paragon Development Co., Ltd. • Director of Siam Piwat Co., Ltd. Experiences • Department of Economic Research, Bank of Thailand • President and CEO of The Siam Commercial Bank Pcl. • Chairman and Chairman of the Compensation Committee of Thai Asset Management Corporation • Independent Director and Chairman of Audit Committee of PTT Pcl. • Director and Chairman of the Audit Committee of Stock Exchange of Thailand • Chairman of the Thai Bankers’ Association % of Shareholding as of • MINT: - None 31 December 2011 • MINT-W4: - None Positions

8. Mr. Emmanuel Jude Dillipraj Rajakarier Positions Age Educational Credential

Other Current Positions Experiences

% of Shareholding as of 31 December 2011

• • • • • • • • • •

Director (Elected in 2008) 47 years (Born in 1965) Master of Business Administration, UK Degree in Computer Systems Analysis & Design, Sri Lanka Director Certificate Program, Thai Institute of Directors Association Director of Minor International Pcl.’s subsidiaries Deputy Chief Financial Officer of Orient-Express Hotels, Trains & Cruises Group Financial Controller of Easi Solutions Pcl. Financial Controller of Le Piaf Restaurants Financial Controller of Desert Express Ltd. T/A Monte’s, London Financial Controller/Group Accountant of London Wine Bars Ltd. • MINT: 2,165,400 shares or 0.07% of paid up shares • MINT-W4: 67,000 units •


202

2011 Annual Report

9. Ms. Chantana Sukumanont

Independent Director (Elected in 2010) • Member of Audit Committee Age • 62 years (Born in 1950) Educational Credential • Advanced Management Program, Harvard Business School, Boston • IMD, Lausanne, Managing for Marketing Success and Senior Management Program • Diploma in Business Studies, The Centre for Economic and Political Studies, England • Bachelor Degree in Accounting, Bangkok University • Bachelor of Business Administration in Marketing, Ramkhamhaeng University Other Current Positions • Honorary Advisor - Industry Committee • Executive Vice President, Marketing & Sales, Siam City Cement Pcl. • Vice President, Thailand Federation of Cement Manufacturers • Director, Listed Companies Association • Director, Association of Capital Market Academy Alumni Experiences • Director, The Federation of Thai Industries • Managing Director, Jalaprathan Cement Pcl. • Managing Director, Jalaprathan Concrete Co., Ltd. % of Shareholding as of • MINT: - None 31 December 2011 • MINT-W4: - None Positions

* On 21 February 2012, Board of Director Meeting No. 1/2012 appointed Mr. Michael David Selby to be a Director in replacement of Mrs. Pratana Mongkolkul who resigned from the position of Director of the Company.

The Board of Directors is responsible for setting policy, planning, controlling, and making decision about the Company’s operation and new business investment except those required by law to pass by resolution from a shareholders meeting. Audit Committee

On 31 December 2011, the Audit Committee comprised of 3 directors as follows; 1. Mr. Kenneth Lee White* Chairman and Independent Director 2. Khunying Jada Watthanasiritham Member and Independent Director 3. Ms. Chantana Sukumanont Member and Independent Director

* Audit committee who experienced in reviewing financial statement.

Audit Committee Scope of Responsibilities

1. To review the Company’s financial reporting process to ensure that it is accurate and adequate 2. To review the Company’s internal control system and internal audit system to ensure that they are suitable and efficient, to determine an internal audit unit’s independence, as well as to approve the appointment, transfer and dismissal of the chief of an internal audit unit or any other unit in charge of an internal audit 3. To review the Company’s compliance with the law on securities and exchange, the Exchange’s regulations, and the laws relating to the Company’s business


Minor International Public company limited

203

4. To consider, select and nominate an independent person to be the Company’s auditor, and to propose such person’s remuneration, as well as to attend a non-management meeting with an auditor at least once a year 5. To review the Connected Transactions, or the transactions that may lead to conflicts of interests, to ensure that they are in compliance with the laws and the Exchange’s regulations, and are reasonable and for the highest benefit of the Company 6. Committee’s report which must be signed by the audit committee’s chairman and consist of at least the following information; • an opinion on the accuracy, completeness and creditability of the Company’s financial report, • an opinion on the adequacy of the Company’s internal control system, • an opinion on the compliance with the law on securities and exchange, the Exchange’s regulations, or the laws relating to the Company’s business, • an opinion on the suitability of an auditor, • an opinion on the transactions that may lead to conflicts of interests, • the number of the audit committee meetings, and the attendance of such meetings by each committee member, • an opinion or overview comment received by the audit committee from its performance of duties in accordance with the charter, and • other transactions which, according to the audit committee’s opinion, should be known to the shareholders and general investors, subject to the scope of duties and responsibilities assigned by the Company’s board of directors; 7. In the case that it is found or suspected that there is a transaction or any of the following acts which may materially affect the Company’s financial condition and operating results, the audit committee shall report it to the board of directors for rectification within the period of time that the audit committee, as deemed appropriated: • a transaction which causes a conflict of interest; • any fraud, irregularity, or material defect in an internal control system; or • an infringement of the law on securities and exchange, the Exchange’s regulations, or any law relating to the Company’s business. 8. To perform any other act as assigned by the Company’s board of directors, with the approval of the audit committee. (The details of roles and responsibilities of Audit Committee is shown in the Audit Committee charter, prescribed in the Company’s website) Definition of Independent Directors

The Board of Directors has determined the definition of “Independent Director” as follows: 1. Holding shares of not more than 1% of paid up capital of the company, parent company, subsidiaries, associates, major shareholder or the company controlling person. The number of held shares shall be inclusive of shares held by any related persons of independent director. 2. Not being or formerly an executive director, employee, staff member, advisor who receives a regular salary or being a controlling person of the company, parent company, subsidiaries, associates, subsidiaries which have the same parent company, major shareholder or the company controlling person except where such relationship was in excess of a period of two years before appointment as an independent director.


204

2011 Annual Report

3. Not being a person who is related by blood or registration under laws, including mother, father, spouses, sibling and children and spouse of children of management, major shareholder, controlling person or a person to be nominated as management or controlling person of the company or subsidiaries. 4. Not having or formerly having a business relationship with the company, parent company, subsidiaries, associates, major shareholders or the company controlling person which may compromise independence. In addition, independent directors may not be or formerly be a significant shareholder, or controlling person who had a business relationship with the company, parent company, subsidiaries, associates, or major shareholder or the company controlling person, except where such relationship was in excess of a period of two years before appointment as an independent director. • The relationships mentioned in the first paragraph include normal business transactions, transactions regarding rental or lease of immovable assets, transactions related to assets and services, transactions regarding financial assistance including lending, borrowing, guarantees, or providing assets to pledge or mortgage loans or any other similar action, which have transaction values higher than 3% of net tangible assets or 20 million baht, whichever is lower. The calculation will include the transaction value taking place with the same person who has business relationship during 12 months period prior to the day of the decision to enter into the transaction and will be subject to the Capital Market Advisory Board Re: Rules on Connected Transactions. 5. Not being or formerly an independent auditor of the company, parent company, subsidiaries, associates, major shareholders, or the company controlling person, and not being a significant shareholder, controlling person or partner of the audit firm which has provided independent auditor services to the company, parent company, subsidiaries, associates, major shareholder or the company controlling person except where such relationship was prior to a two years period before appointment as an independent director. 6. Not being or formerly providing professional services including legal advice, financial advice which received a service fee higher than two million baht per year from the company, parent company, subsidiaries, associates, major shareholder or the company controlling person and not being a significant shareholder, controlling person of partner of the independent service provider except such relationship was in excess of a period of two years before the appointment as an independent director. 7. Not being a director who was appointed as a representative of a director of the company, major shareholder or shareholder who is related to the major shareholder of the company. 8. Not provide the same services as the company and not being competitors of the company and subsidiaries or not being a significant partner in partnership or being a executive director, staff, employee, consultant who receives regular payroll, or holding over 1% of voting rights of other company which operates the same business and compete with the company and subsidiaries. 9. Not having any other conflicts, that prevent independent directors from giving independent opinions to the Company. Compensation Committee

On 31 December 2011, Compensation Committee comprised of 3 directors as follows; 1. Mr. Kenneth L. White Chairman 2. Mr. Anil Thadani Member 3. Mr. Weerawong Chittmittrapap Member


Minor International Public company limited

205

Compensation Committee Scope of Responsibilities

Consider remuneration of the senior executives. (The details of roles and responsibilities of Compensation Committee is shown in the Compensation Committee Charter, prescribed in the Company’s website.) Nominating and Corporate Governance Committee

On 31 December 2011, Nominating and Corporate Governance Committee comprised of 3 directors as follows; 1. Mr. Weerawong Chittmittrapap Chairman 2. Mr. Anil Thadani Member 3. Mr. Kenneth L. White Member Nominating and Corporate Governance Committee Scope of Responsibilities

1. Consider and select qualified delegates to fill the vacant position of the Company’s director. 2. Review and recommend to Annual General Meeting of Shareholders the remuneration of the Company’s directors. 3. Review and recommend to the Board the Corporate Governance Guidelines in order to comply with the Good Corporate Governance Principals, specified by the Stock Exchange of Thailand, Securities Exchange and Commissions, and Thai Institute of Directors Association 4. Ensure the Company’s operation to comply with the Company’s Corporate Governance Guidelines 5. Report the Corporate Governance to the Board (The details of roles and responsibilities of Nominating and Corporate Governance is shown in the Nominating and Corporate Governance Committee Charter, prescribed in the Company’s website.) Executive Management

As of 31 December 2011, 6 Managements as follows; 1. Mr. William E. Heinecke Chairman and Chief Executive Officer 2. Mrs. Pratana Mongkolkul* Chief Financial Officer 3. Ms. Trithip Sivakriskul** Corporate Chief Financial Officer 4. Mr. Somsak Tanruengsri General Manager 5. Ms. Eve Danielle Weatherburn*** Vice President, Marketing 6. Mr. Chaiyapat Paitoon Vice President, Strategic Planning

* Resigned 1 January 2012. ** Appointed 2 December 2011. *** Resigned 16 January 2012.


206

2011 Annual Report

Biographies of Mr. William E. Heinecke and Mrs. Pratana Mongkolkul are presented under “Board of Directors” section. The biographies of remaining 4 executive managements are presented as followings: 1. Ms. Trithip Sivakriskul

Age • Educational Credential • • • • • • Experiences • • Position

% of Shareholding as of

Corporate Chief Financial Officer 45 years (Born in 1966) MBA, Sasin Graduate institute Business Administration of Chulalongkorn University Capital Market Academy Leadership Program, Capital Market Academy (CMA) Class 9/2009 Successful Formulation and Execution the Strategy Class 3/2009 (SFE3), Thai Institute of Directors (IOD) TLCA Executive Development Program Class 2 (EDP 2), Thai Listed Companies Association Corporate Secretary Development Program, Thai Listed Companies Association Director Accreditation Program (DAP) Class 31/2005, Thai Institute of Directors (IOD) Chief Financial Officer, Ratchaburi Electricity Generating Holding Pcl. Executive Vice President - Corporate Finance, IRPC Pcl. • - None •

31 December 2011 2. Mr. Somsak Tanruengsri Position Age Educational Credential Experiences % of Shareholding as of

• • •

General Manager 58 years (Born in 1954) Front Office & Housekeeping Management, University of Hawaii General Manager, Royal Garden Resort Pattaya • 69,400 •

31 December 2011 3. Ms. Eve Danielle Weatherburn

Age • Educational Credential • • Experiences • % of Shareholding as of • Position

31 December 2011

Vice President, Marketing 40 years (Born in 1972) Master of Business (Marketing), University of Technology Sydney, Australia Bachelor of Education, Sydney, Australia Brand Director, Intercontinental Hotel & Resorts and Crowne Plaza Hotels and Resorts - None -


Minor International Public company limited

4. Mr. Chaiyapat Paitoon

Age • Educational Credential • • Experiences • • % of Shareholding as of • Position

Vice President, Strategic Planning 41 years (Born in 1971) M.B.A., Finance and International Business, University of Notre Dame, Indiana, United States of America Bachelor of Accountancy, Chulalongkorn University Senior Vice President-Division Head-Investor Relations; and Division Head-Equity Investment Management, Siam Commercial Bank Investment Representative, Morgan Stanley - None -

31 December 2011

Corporate Secretary

Ms. Saranya Soontaros

Investor Relations

Mr. Chaiyapat Paitoon

207


208

2011 Annual Report

Number of Corporate Securities held by Directors and Executive Management as of 31 December 2011

No. of Securities Held

No. of Increase

at 31 December 2011

(Decrease)

Common ESOP* MINT-W4

Common ESOP* MINT-W4

Name Title

Share

Share

1. Mr. William E. Heinecke Chairman 362,841,622 975,800 22,334,191 1,725,800 (725,800) and CEO 2. Mr. Paul Charles Kenny Director 6,171,078 1,900,000 434,627 1,005,000 (850,000) - 3. Mrs. Pratana Mongkolkul Director 12,411,431 975,800 1,421,594 2,057,587 (1,807,300) - 4. Mr. Kenneth Lee White Director 69,114 - 6,911 - - - 5. Mr. Weerawong Director - - - - - Chittmittrapap 6. Mr. Anil Thadani Director 57,688,866 - 5,555,157 2,137,300 - - 7. Khunying Jada Director - - - - - Wattanasiritham 8. Mr. Emmanuel Jude Director 2,165,400 825,000 67,000 1,245,400 (575,000) Dillipraj Rajakarier 9. Ms. Chantana Director - - - - - Sukumanont 10. Ms. Trithip Sivakriskul Corporate - - - - - Chief Financial Officer 11. Mr. Somsak Tanruengsri General 69,400 280,100 - 69,400 (69,400) Manager 12. Ms. Eve Danielle VP of - - - - - Weatherburn Marketing 13. Mr. Chaiyapat Paitoon VP of - - - - - Strategic Planning

* ESOP: Warrants allotted to Employees and Directors of the Company and/or subsidiaries.


Minor International Public company limited

209

Top 10 Major Shareholders as of 7 FEBRUARY 2012

Name of shareholders

Number of shares

Proportion of shareholding

1. Group of Mr. William Ellwood Heinecke1 a. Minor Holding (Thai) Limited b. Mr. William Ellwood Heinecke c. Mrs. Kathleen Ann Heinecke 2. Mr. Nithi Osathanugrah 3. Thai NVDR Ltd. 4. Mr. John Scott Heinecke 5. Merrill Lynch, Pierce, Fenner & Smith Inc. 6. Symphony Capital Partners Limited 7. State Street Bank Europe Limited 8. Mr. David Heinecke 9. His Majesty King Bhumibol Aduyadej 10. CPB Equity Company Limited

909,581,433 546,755,902 362,821,622 3,909 259,079,714 193,995,933 165,007,648 151,219,940

27.8% 16.7% 11.1% 0.0% 7.9% 5.9% 5.0% 4.6%

112,290,000 111,618,959 85,100,051 72,470,861 69,720,115

3.4% 3.4% 2.6% 2.2% 2.1%

Source: The Thailand Securities Depository Co., Ltd. Remark: 1 This list of shareholder is grouped under the Notification of SEC Kor Chor 17/2551 dated 15 December 2008, not Section 258 of the Public Limited Companies Act, B.E. 2535 (1992).


210

2011 Annual Report

Subsidiaries Associated and Affiliated Companies

Number of Ordinary Shares Core Business Outstanding Held Equity

Interest

Hotel operation th 99 Berli Jucker House, 16 Floor, and shopping mall 12,000,000 9,748,670 81.2% Soi Rubia, Sukhumvit 42, Prakanong, Anantara Bangkok Klongtoey, Bangkok 10110 Riverside Resort and Spa Tel. +66 (0) 2381 5151 Royal Garden Plaza Fax +66 (0) 2381 5777-8 Bangkok Hua Hin Resort Limited Hotel operation 2,000,000 1,999,998 100% 99 Berli Jucker House, 16th Floor, Hua Hin Marriott Resort Soi Rubia, Sukhumvit 42, Prakanong, and Spa Klongtoey, Bangkok 10110 Tel. +66 (0) 2381 5151 Fax +66 (0) 2381 5777-8 Maerim Terrace Resort Limited Hotel operation 3,000,000 1,359,370 71.4% th 99 Berli Jucker House, 16 Floor, Four Seasons Resort (% included held Soi Rubia, Sukhumvit 42, Prakanong, Chiang Mai by Rajadamri Hotel Plc. Klongtoey, Bangkok 10110 781,250 shares) Tel. +66 (0) 2381 5151 Fax +66 (0) 2381 5777-8 Royal Garden Development Limited In liquidation process 7,000,000 6,999,994 100% 99 Berli Jucker House, 16th Floor, Soi Rubia, Sukhumvit 42, Prakanong, Klongtoey, Bangkok 10110 Tel. +66 (0) 2381 5151 Fax +66 (0) 2381 5777-8 Samui Resort and Spa Limited Hotel operation 100,000 99,998 100% th 99 Berli Jucker House, 16 Floor, Anantara Bophut Soi Rubia, Sukhumvit 42, Prakanong, Resort and Spa, Klongtoey, Bangkok 10110 Koh Samui Tel. +66 (0) 2381 5151 Fax +66 (0) 2381 5777-8 Chao Phaya Resort Limited


Minor International Public company limited

211

Number of Ordinary Shares Core Business Outstanding Held Equity

Interest

Hotel operation 45,000,000 44,510,793 98.9% 155 Rajadamri Road, Bangkok 10330 Four Seasons Hotel Tel. +66 (0) 2250 0754 Bangkok Fax +66 (0) 2253 9195 MI Square Limited Hotel operation 100,000 99,998 100% 99 Berli Jucker House, 16th Floor, Anantara Phuket Villas Soi Rubia, Sukhumvit 42, Prakanong, JW Marriott Phuket Klongtoey, Bangkok 10110 Tel. +66 (0) 2381 5151 Fax +66 (0) 2381 5777-8 • Rajadamri Residence Limited Hotel and sales 5,000,000 4,999,998 100% 155 Rajadamri Road, Bangkok 10330 of property (100% held by Tel. +66 (0) 2250 0754 Project Development MI Square Limited) Fax +66 (0) 2253 9195 St. Regis • Rajadamri Lodging Limited Hotel operation 300,000 299,998 100% 99 Berli Jucker House, 16th Floor, St. Regis Hotel (100% held by Soi Rubia, Sukhumvit 42, Prakanong, Bangkok MI Square Limited) Klongtoey, Bangkok 10110 Tel. +66 (0) 2381 5151 Fax +66 (0) 2381 5777-8 • Zuma Bangkok Limited Sales of food 160,000 81,598 51% th 99 Berli Jucker House, 16 Floor, and beverage (51% held by Soi Rubia, Sukhumvit 42, Prakanong, Rajadamri Lodging Limited) Klongtoey, Bangkok 10110 Tel. +66 (0) 2381 5151 Fax +66 (0) 2381 5777-8 Hua Hin Village Limited Hotel operation 500,000 499,998 100% 99 Berli Jucker House, 16th Floor, Anantara Hua Hin Soi Rubia, Sukhumvit 42, Prakanong, Resort and Spa Klongtoey, Bangkok 10110 Hua Hin Tel. +66 (0) 2381 5151 Fax +66 (0) 2381 5777-8 Baan Boran Chiangrai Limited Hotel operation 1,650,000 1,649,998 100% th 99 Berli Jucker House, 16 Floor, Anantara Golden Triangle Soi Rubia, Sukhumvit 42, Prakanong, Resort & Spa, Klongtoey, Bangkok 10110 Chiang Rai Tel. +66 (0) 2381 5151 Four Seasons Tented Fax +66 (0) 2381 5777-8 Camp Chiangrai Rajadamri Hotel Public Company Limited


212

2011 Annual Report

Number of Ordinary Shares

Core Business Outstanding Held Equity

Interest

Hotel operation 375,000 374,994 100% th 99 Berli Jucker House, 16 Floor, Four Seasons Soi Rubia, Sukhumvit 42, Prakanong, Resort - Koh Samui Klongtoey, Bangkok 10110 Tel. +66 (0) 2381 5151 Fax +66 (0) 2381 5777-8 Samui Village Limited

Coco Palm Hotel and Resort Limited

Hotel operation

1,730,000

1,729,994

100%

Coco Recreation Limited

Hotel operation

10,000

9,993

100%

99 Berli Jucker House, 16 Floor, Soi Rubia, Sukhumvit 42, Prakanong, Klongtoey, Bangkok 10110 Tel. +66 (0) 2381 5151 Fax +66 (0) 2381 5777-8 th

99 Berli Jucker House, 16 Floor, Soi Rubia, Sukhumvit 42, Prakanong, Klongtoey, Bangkok 10110 Tel. +66 (0) 2381 5151 Fax +66 (0) 2381 5777-8 th

Samui Beach Club Owner Limited

Hotel operation 10,000 9,998 100% 99 Berli Jucker House, 16th Floor, & rent of property Soi Rubia, Sukhumvit 42, Prakanong, Klongtoey, Bangkok 10110 Tel. +66 (0) 2381 5151 Fax +66 (0) 2381 5777-8

Royal Garden Plaza Limited

Shopping mall 750,000 749,997 100% 99 Berli Jucker House, 16th Floor, Royal Garden Plaza Soi Rubia, Sukhumvit 42, Prakanong, Shopping Mall - Pattaya Klongtoey, Bangkok 10110 Turtle Village Tel. +66 (0) 2381 5151 Shopping Plaza - Phuket Fax +66 (0) 2381 5777-8

MSpa International Limited

Spa Services 410,000 209,099 100% 99 Berli Jucker House, 16th Floor, (% included held by Soi Rubia, Sukhumvit 42, Prakanong, Hospitality Investment Klongtoey, Bangkok 10110 International Limited Tel. +66 (0) 2381 5151 200,900 shares) Fax +66 (0) 2381 5777-8 MSpa Ventures Limited Spa Services 50,000 50,000 100% East Asia Chambers, in Eastern Asia (100% held by P.O. Box 901, Road Town, MSpa International Limited) Tortola, British Virgin Islands

•


Minor International Public company limited

213

Number of Ordinary Shares Core Business Outstanding Held Equity

Interest

Mspa Enterprise Management Spa Services in China 140,000 140,000 100% (Shianghai) Limited (100% held by Suite 03, 12/F, Block A, MSpa Ventures Limited) 18 Tao Lin Road, Pudong New Area, Shanghai, China • Arabian Spas (Dubai) (LLC) Spa services in UAE 300 147 49% P.O. Box 88, Dubai, UAE (49% held by MSpa Ventures Limited) Samui Beach Residence Limited Sales of property 10,000 9,993 100% in Koh Samui 99 Berli Jucker House, 16th Floor, Soi Rubia, Sukhumvit 42, Prakanong, Klongtoey, Bangkok 10110 Tel. +66 (0) 2381 5151 Fax +66 (0) 2381 5777-8 Coco Residence Limited Sales of property 10,000 9,998 100% th 99 Berli Jucker House, 16 Floor, Soi Rubia, Sukhumvit 42, Prakanong, Klongtoey, Bangkok 10110 Tel. +66 (0) 2381 5151 Fax +66 (0) 2381 5777-8 Minor Hotel Group Limited Hotel Management 170,000 169,997 100% 99 Berli Jucker House, 16th Floor, Soi Rubia, Sukhumvit 42, Prakanong, Klongtoey, Bangkok 10110 Tel. +66 (0) 2381 5151 Fax +66 (0) 2381 5777-8 • Hospitality Investment International Holding Investment 1,000 1,000 100% Limited (“HIIL”) (100% held by East Asia Corporate Services Minor Hotel Group Limited) (BVI)Limited East Asia Chambers, P.O. Box 901, Road Town, Tortola, British Virgin Islands • Lodging Management (Labuan) Limited Hotel management 1,000 1,000 100% Level 15 (A2), Main Office Tower, (100% held by HIIL) Financial Park labuan, Jalan Merdeka, 87000 Labuan FT, Malaysia •


214

2011 Annual Report

Number of Ordinary Shares Core Business Outstanding Held Equity

Interest

Lodging Management Hotel management 1,000 1,000 100% (Mauritius) Limited (100% held by HIIL) C/O DTOS Limited, 10th Floor, Raffles Tower, 19 Cyber City, Ebene, Republic of Mauritius • PT Lodging Management Hotel management 150,000 150,000 100% (Indonesia) Limited (93.3% held by HIIL Graha Niaga, 24th Floor, and 6.7% by LIL) Jalan Jenderal Sudirman, Kav. 58 Jakarta, Indonesia 12190 • Jada Resort and Spa (Private) Limited Hotel operation 102,384,759 82,010,192 80.1% Formerly Cyprea Lanka (80.1% held by HIIL) (Private) Limited No. 45 Braybrooke Street, Colombo, Sri Lanka • Elewana Investment Limited Holding Investment 1,000 1,000 100% th C/O DTOS Limited, 10 Floor, (100% held by HIIL) Raffles Tower, 19 Cyber City, Ebene, Republic of Mauritius • Tanzania Tourism and Hospitality Holding investment 2 1 50% Investment Limited (“TTHIL”) (50% held by HIIL) Akara Building, 24 De Castro Street, Wickhams Cay 1, P.O. Box 3136, Road Town, Tortola, British Virgin Islands • Elewana Afrika (T) Limited Hotel Operation 2,500 2,500 100% 99 Serengeti Road, (100% held by TTHIL) Sopa Plaza, P.O. Box 12814, Arusha, Tanzania • Elewana Afrika (K) Limited Holding investment 2 2 100% New Rehema House, (100% held by TTHIL) Phapta Road, P.O. Box 67486, 00200, Nairabi, Kenya •


Minor International Public company limited

215

Number of Ordinary Shares Core Business Outstanding Held Equity

Interest

Flora Holding Limited Hotel invesment 10,000 10,000 100% New rehema House, (100% held by Phapta Road, Elewana Afrika (K) Limited) P.O. Box 67486, 00200, Nairabi, Kenya • Parrots Limited Hotel Operation 2 2 100% LR No. 13603, (100% held by Mombasa South, Flora Holding Limited) Diani Beach Road, Ukunda, Kenya • Rocky Hill Limited Hotel operation 2 2 100% P.O. Box 67486, 00200, (100% held by Nairabi, Kenya Elewana Afrika (K) Limited) • Sand River Eco Camp Limited Hotel operation 100 100 100% P.O. Box 67486, 00200, (100% held by Nairabi, Kenya Elewana Afrika (K) Limited) • Zanzibar Tourism and Hospitality Holding investment 2 1 50% Investment Limited (“ZTHIL”) (50% held by HIIL) Akara Building, 24 De Castro Street, Wickhams Cay 1, P.O. Box 3136, Road Town, Tortola, British Virgin Islands • Elewana Afrika (Z) Limited Hotel Operation 202 202 100% Peponi Plaza, Peponi Road, (100% held by ZTHIL) P.O. Box 726300, 00200, Nairabi, Kenya • The Grande Stone Town Limited Hotel investment 100,000 100,000 100% P.O. Box 12814, (100% held by ZTHIL) Arusha, Tanzania • Parachichi Limeted Hotel operation 10,000 10,000 100% P.O. Box 3998, (100% held by Dar es Salaam, The Grande Stone Tanzania Town Limited) •


216

2011 Annual Report

Number of Ordinary Shares

Core Business Outstanding Held Equity

Interest

Management 262,515 262,513 100% th 99 Berli Jucker House, 16 Floor, Soi Rubia, Sukhumvit 42, Prakanong, Klongtoey, Bangkok 10110 Tel. +66 (0) 2381 5151 Fax +66 (0) 2381 5777-8

RNS Holdings Limited

Minor Global Solutions Limited

Management

200,000

199,998

100%

Chao Phraya Resort & Residence Limited

Hotel operation & 10,000 9,993 100% sales of property

RGR International Limited

Management

99 Berli Jucker House, 16 Floor, Soi Rubia, Sukhumvit 42, Prakanong, Klongtoey, Bangkok 10110 Tel. +66 (0) 2381 5151 Fax +66 (0) 2381 5777-8 th

99 Berli Jucker House, 16th Floor, Soi Rubia, Sukhumvit 42, Prakanong, Klongtoey, Bangkok 10110 Tel. +66 (0) 2381 5151 Fax +66 (0) 2381 5777-8 100,000

100,000

100%

East Asia Chambers, P.O. Box 901, Road Town, Tortola, British Virgin Islands

• Eutopia

Private Holding Limited

Hotel operation

• Harbour

View Limited

Hotel Operation 11,000,000 3,342,900 30.39% Harbour View Hotel (30.39% held by & Office Tower RGR International Limited) Haiphong - Vietnam

39, Orchid Magu, Maafannu, Male, Maldives 4 Tran Phu Street, Hai Phong, Vietnam

1,000,000

499,998 50% (50% held by RGR International Limited)

R.G.E. (HKG) Limited

Management 100,000 99,999 100% Level 28, Three Pacific Place, Queens Road East, Hong Kong

M & H Management Limited

Management 1,000 1,000 100% C/O DTOS Limited, 4 Floor, IBL House, Caudan, Port Louis, Republic of Mauritius th


Minor International Public company limited

217

Number of Ordinary Shares

Core Business Outstanding Held Equity

Interest

Holding investment 1,000 1,000 100% Limited (“LIL”) Level 15 (A2), Main Office Tower, Financial Park labuan, Jalan Merdeka, 87000 Labuan FT, Malaysia Lodging Investment (Labuan)

• Serendib

Hotel Limited

2 Floor, AA Building, 40, Sir Mohamed Macan Markar Mawatha, Colombo 03 nd

Hotel

111,525,794 22,128,756 19.9% (19.9% held by LIL) shares consitsts of voting and non voting shares

Minor International (Labuan) Limited

Hotel operation 1,000 1,000 100% Level 15 (A2), Main Office Tower, Financial Park Labuan, Jalan Merdeka, 87000 Labuan FT, Malaysia AVC Club Developer Limited

Sales of Point for 1,000 1,000 100% right-to-use in time sharing resort Marriott Phuket Beach Club

AVC Vacation Club Limited

Sales of Point for 1,000 1,000 100% right-to-use in time sharing resort Marriott Phuket Beach Club

C/O DTOS Ltd, 10th Floor, Raffles Tower, 19 Cybercity, Ebene, Mauritius

C/O DTOS Ltd, 10th Floor, Raffles Tower, 19 Cybercity, Ebene, Mauritius

10,000 100% Level 28, Three Pacific Place, (100% held by 1 Queen’s road east, AVC Vacation Club Limited) Wanchai, Hong Kong

• Anantara

Vacation Club (HK) Limited

Marketing Services Hong kong

10,000

Thai Project Property Fund

Property Investment 7,477,508 7,477,451 100% The Mutual Fund Public Company Limited 30th - 32nd Floor, Lake Rajada Building, 193 - 195 Ratchadaphisek Road, Klongtoey, Bangkok 10110

Sub Thawee Property Fund

Property Investment 50,000,000 5,000,000 10% 11 Q House Sathorn Building, M Floor, South Sathorn Road, Thungmahamek, Bangkok 10120 Tel. +66 (0) 2670 4900 Fax +66 (0) 2670 1820


218

2011 Annual Report

Number of Ordinary Shares Core Business Outstanding Held Equity

Interest

Property Investment 136,500,000 36,500,000 27% 11 Q House Sathorn Building, M Floor, South Sathorn Road, Thungmahamek, Bangkok 10120 Tel. +66 (0) 2670 4900 Fax +66 (0) 2670 1820 Phuket Beach Club Owner Limited Management 10,000 9,998 100% 99 Berli Jucker House, 16th Floor, Soi Rubia, Sukhumvit 42, Prakanong, Klongtoey, Bangkok 10110 Tel. +66 (0) 2381 5151 Fax +66 (0) 2381 5777-8 Maikhao Vacation Villas Limited Sales of Right-to-Use 400,000 199,998 50% th 99 Berli Jucker House, 16 Floor, in time sharing Soi Rubia, Sukhumvit 42, Prakanong, resort Marriott Klongtoey, Bangkok 10110 Phuket Beach Club Tel. +66 (0) 2381 5151 Fax +66 (0) 2381 5777-8 S & P Syndicate Public Sale of food 98,081,673 30,717,084 31.32% Company Limited and beverage 457 - 457/6 Soi Sukhumvit 55 (Soi Thonglor), Sukhumvit Road, Khlong Ton Nua, Wattana, Bangkok The Minor Food Group Public Sales of food 32,730,684 32,640,629 99.72% Company Limited (“MFG”) and beverage 99 Berli Jucker House, 15th, 16th Floor, Soi Rubia, Sukhumvit 42, Prakanong, Klongtoey, Bangkok 10110 Tel. +66 (0) 2381 5123-32 Fax +66 (0) 2381 5118-9 • Swensen’s (Thai) Limited Sales of food 1,000,000 999,998 100% 99 Berli Jucker House, and beverage (100% held by MFG) 15th, 16th Floor, Soi Rubia, Ice cream Sukhumvit 42, Prakanong, Parlour Klongtoey, Bangkok 10110 Swensen’s Tel. +66 (0) 2381 5123-32 Fax +66 (0) 2381 5118-9 Thai Asset Management Property Fund


Minor International Public company limited

219

Number of Ordinary Shares Core Business Outstanding Held Equity

Interest

Cheese Limited Manufacturing 600,000 599,997 100% th 99 Berli Jucker House, 16 Floor, and sales (100% held by MFG) Soi Rubia, Sukhumvit 42, Prakanong, of cheese Klongtoey, Bangkok 10110 Tel. +66 (0) 2381 5123-32 Fax +66 (0) 2381 5118-9 • Minor Dairy Limited Manufacturing 600,000 599,997 100% 99 Berli Jucker House, 16th Floor, and sales (100% held by MFG) Soi Rubia, Sukhumvit 42, Prakanong, of ice-cream Klongtoey, Bangkok 10110 Tel. +66 (0) 2381 5123-32 Fax +66 (0) 2381 5118-9 • Minor DQ Limited Sales of food 160,000 159,998 100% th 99 Berli Jucker House, 15 Floor, and beverage (100% held by MFG) Soi Rubia, Sukhumvit 42, Prakanong, Kiosk-Dairy Queen Klongtoey, Bangkok 10110 DQ Grill & Chill Tel. +66 (0) 2381 5123-32 Fax +66 (0) 2381 5118-9 • Catering Associates Limited Catering services 50,000 25,495 51% 99 Berli Jucker House, 16th Floor, (51% held by MFG) Soi Rubia, Sukhumvit 42, Prakanong, Klongtoey, Bangkok 10110 Tel. +66 (0) 2381 5123-32 Fax +66 (0) 2381 5118-9 • Burger (Thailand) Limited Sales of food 1,000,000 949,799 95% th 99 Berli Jucker House, 12 Floor, and beverage (95% held by MFG) Soi Rubia, Sukhumvit 42, Prakanong, Restaurant Klongtoey, Bangkok 10110 Burger King Tel. +66 (0) 2381 5123-32 Fax +66 (0) 2381 5118-9 • International Franchise Holding Franchise owner 1,800,000 1,800,000 100% (Labuan) Limited (“IFH”) (100% held by MFG) Level 7(E), Main Office Tower, (Regist. Capital USD 4 million Financial Park Labuan, but only USD 1.8 million Jalan Merdeka, 87000 Labuan, paid up) F.T. Labuan, Malaysia Tel. (087) 443 118/188 Fax (087) 441 288 • Minor


220

2011 Annual Report

Number of Ordinary Shares Core Business Outstanding Held Equity

Interest

Investment Corporation Franchise owner 16,000,000 16,000,000 100% of Asia Limited (“FICA”) (100% held by IFH) Level 2, Pal Grove House, Road Town, Tortola, British Vergin Islands • The Minor Food Group Sales of food RMB RMB 100% (China) Limited and beverage 70 million 70 million 4/F, Sichuan Building Annex, Franchise of (Held 100% by FICA) Beilishi Rd., Xicheng, Lejazz, Pizza Beijing, China and Sizzler in Beijing • Sizzler China Pte. Ltd. Franchise owner 2 1 50% 6 Shenton Way, #28-09 Restaurant - (Held 50% shares by IFH) DBS Building Tower 2, Sizzler in China Singapore 068809 • SLRT Limited Sales of food 4,000,000 3,999,998 100% th 99 Berli Jucker House, 12 Floor, and beverage (100% held by MFG) Soi Rubia, Sukhumvit 42, Prakanong, Restaurant Klongtoey, Bangkok 10110 Sizzler Tel. +66 (0) 2381 5123-32 Fax +66 (0) 2381 5118-9 • Primacy Investment Limited Holding 1,000 1,000 100% (“Primacy”) investment (100% held by MFG) DTOS Limited, 4th Floor, IBL House Caudan, Port Louis, Mauritius • Delicious Foodstuff (Labuan) Holding 1,000 1,000 100% Limited investment (100% held by Primacy) Level 15 (A2), Main Office Tower, Financial Park labuan, Jalan Merdeka, 87000 Labuan FT, Malaysia • Delicious Beverage (Labuan) Holding 1,000 1,000 100% Limited investment (100% held by Primacy) Level 15 (A2), Main Office Tower, Financial Park labuan, Jalan Merdeka, 87000 Labuan FT, Malaysia • Franchise


Minor International Public company limited

221

Number of Ordinary Shares Core Business Outstanding Held Equity

Interest

Food Holding Holding 1,000 1,000 100% (Singapore) Pte. Ltd. (“DFHS”) investment (100% held by Primacy) 8 Cross Street # 11-00 PWC Building, Singapore 048424 • Delicious Food Holding Holding 1,000 1,000 100% (Australia) Pte. Ltd. (“DFHA”) investment (100% held by DFHS) Home Wilkinson Lowry, Level 2, 500 Queen Street, Brisbane, QLD 4000 • The Coffee Club Holdings Holding 46,000,000 23,000,000 50% Pty Limited (“TCCA”) investment (50% held by DFHA) 336 - 338 Montague Road, West End QLD, Australia 4101 • Expresso Pty. Ltd. Property 100 100 100% 336 - 338 Montague Road, Investment (100% held by TCCA) West End QLD, Australia 4101 • The Coffee Club Investment Franchise owner 28,616,600 28,616,600 100% Pty. Ltd. (100% held by TCCA) 336 - 338 Montague Road, West End QLD, Australia 4101 • The Coffee Club Franchising Franchise 17,282,200 17,282,200 100% Pty. Ltd. Business (100% held by TCCA) 336 - 338 Montague Road, West End QLD, Australia 4101 • The Coffee Club (NSW) Pty. Ltd. Property 2 2 100% 336 - 338 Montague Road, Investment (100% held by TCCA) West End QLD, Australia 4101 • The Coffee Club (Vic) Pty. Ltd. Property 2 2 100% 336 - 338 Montague Road, Investment (100% held by TCCA) West End QLD, Australia 4101 • Delicious


222

2011 Annual Report

Number of Ordinary Shares Core Business Outstanding Held Equity

Interest

Coffee Club (Properties) Property 100 100 100% Pty. Ltd. Investment (100% held by TCCA) 336 - 338 Montague Road, West End QLD, Australia 4101 • The Coffee Club Properties Property 2 2 100% (NSW) Pty. Ltd. Investment (100% held by TCCA) 336 - 338 Montague Road, West End QLD, Australia 4101 • The Coffee Club Pty. Ltd. Franchise owner 2 2 100% (as trustee for the Coffee (100% held by TCCA) Club Unit Trust) 336 - 338 Montague Road, West End QLD, Australia 4101 • The Coffee Club (International) Franchise owner 100 100 100% Pty. Ltd. (100% held by TCCA) 336 - 338 Montague Road, West End QLD, Australia 4101 • The Coffee Club (Korea) Franchise owner 100 100 100% Pty. Ltd. (100% held by TCCA) 336 - 338 Montague Road, West End QLD, Australia 4101 • The Coffee Club (Mena) Franchise owner 100 100 100% Pty. Ltd. (100% held by TCCA) 336 - 338 Montague Road, West End QLD, Australia 4101 • The Coffee Club (NZ) Pty. Ltd. Franchise owner 100 100 100% 336 - 338 Montague Road, (100% held by TCCA) West End QLD, Australia 4101 • The


Minor International Public company limited

223

Number of Ordinary Shares Core Business Outstanding Held Equity

Interest

Avenue Company Sale of food 100 100 100% Pty. Ltd. and beverage (100% held by TCCA) 336 - 338 Montague Road, West End QLD, Australia 4101 • Ribs and Rumps Holding Sale of food 1 1 100% Pty. Ltd. and beverage (100% held by TCCA) 336 - 338 Montague Road, West End QLD, Australia 4101 • Delicious Food Australia Management 100 100 100% Finance Pty. Ltd. (100% held by DFHS) HWL EBSWorth, Level 23, ‘Riverside Center’, 123 Eagle Street, Brisbane, QLD 4000 • MHG Hotel Holding Australia Holding 100 100 100% Pty. Ltd. (“MHH”) Investment (100% held by DFHS) HWL EBSWorth, Level 23, ‘Riverside Center’, 123 Eagle Street, Brisbane, QLD 4000 • Oaks Hotels & Resorts Ltd. Providing 173,831,898 173,831,898 100% Level 5, 26 Duporth Avenue, services for (100% held by MHH) Maroochydore, QLD 4558 accommodation • ThaiExpress Concepts Holding 300,000 300,000 100% Pte. Ltd. (“ThaiExpress”) investment (100% held by Primacy) 2 Alexandra road, #05-04/05 Delta House, Singapore 159919 Tel. (65) 6238 0525 Fax (65) 6238 7018 • The ThaiExpress Restaurant Sale of Food 100,000 100,000 100% Pte. Ltd. and beverage (100% held by ThaiExpress) 2 Alexandra road, #05-04/05 Delta House, Singapore 159919 Tel. (65) 6238 0525 Fax (65) 6238 7018 • First


224

2011 Annual Report

Number of Ordinary Shares Core Business Outstanding Held Equity

Interest

Design International Sale of Food 100,000 100,000 100% Pte. Ltd. and beverage (100% held by ThaiExpress) 2 Alexandra road, #05-04/05 Delta House, Singapore 159919 Tel. (65) 6238 0525 Fax (65) 6238 7018 • NYS Pte. Ltd. Sale of Food 100,000 100,000 100% 2 Alexandra road, and beverage (100% held by ThaiExpress) #05-04/05 Delta House, Singapore 159919 Tel. (65) 6238 0525 Fax (65) 6238 7018 • PS07 Pte. Ltd. Sale of Food 100,000 100,000 100% 2 Alexandra road, and beverage (100% held by ThaiExpress) #05-04/05 Delta House, Singapore 159919 Tel. (65) 6238 0525 Fax (65) 6238 7018 • TES07 Pte. Ltd. Sale of Food 500,000 500,000 100% 2 Alexandra road, and beverage (100% held by ThaiExpress) #05-04/05 Delta House, Singapore 159919 Tel. (65) 6238 0525 Fax (65) 6238 7018 • XWS Pte. Ltd. Sale of Food 100,000 100,000 100% 2 Alexandra road, and beverage (100% held by ThaiExpress) #05-04/05 Delta House, Singapore 159919 Tel. (65) 6238 0525 Fax (65) 6238 7018 • Shokudo Concepts Pte. Ltd. Sale of Food 100,000 100,000 100% 2 Alexandra road, and beverage (100% held by ThaiExpress) #05-04/05 Delta House, Singapore 159919 Tel. (65) 6238 0525 Fax (65) 6238 7018 • BBZ


Minor International Public company limited

225

Number of Ordinary Shares Core Business Outstanding Held Equity

Interest

Heeren Pte. Ltd. Sale of Food 100,000 100,000 100% 2 Alexandra road, and beverage (100% held by ThaiExpress) #05-04/05 Delta House, Singapore 159919 Tel. (65) 6238 0525 Fax (65) 6238 7018 • The Bund Pte. Ltd. Sale of Food 100,000 100,000 100% 2 Alexandra road, and beverage (100% held by ThaiExpress) #05-04/05 Delta House, Singapore 159919 Tel. (65) 6238 0525 Fax (65) 6238 7018 • Lotus Sky Sdn Bhd Sale of Food 100,000 100,000 100% st 1 Ground Floor, and beverage (100% held by ThaiExpress) Unit G-838, 1 Borneo Hypermall Jalan Sulaman, 88400 Kota Kinabalu, Sabah, Malaysia • ThaiExpress Concepts Sdn Bhd Sale of Food 2 2 100% LG 311, 1 Utama and beverage (100% held by ThaiExpress) Shopping Centre 1, Lebuh Bandar Utama, Bandar Utama, 47800 Petalin Jaya, Selangor, Malaysia • The Coffee Club (Thailand) Limited Sale of Food 20,000 19,998 100% th 99 Berli Jucker House, 15 Floor, and beverage (100% held by MFG) Soi Rubia, Sukhumvit 42, Prakanong, Klongtoey, Bangkok 10110 Tel. +66 (0) 2381 5123-32 Fax +66 (0) 2381 5118-9 • Select Service Partner Limited (“SSP”) Sale of Food 450,000 229,494 51% 99 Berli Jucker House, 16th Floor, and beverage (51% held by MFG) Soi Rubia, Sukhumvit 42, Prakanong, Restaurant-Bangkok, Klongtoey, Bangkok 10110 Chiang Mai, Phuket, Tel. +66 (0) 2381 5123-32 Had Yai, Krabi, Fax +66 (0) 2381 5118-9 Phanom Penh, Siem Reap Airports • Shokudo


226

2011 Annual Report

Number of Ordinary Shares Core Business Outstanding Held Equity

Interest

Service Partner (Cambodia) Sale of food 1,000 1,000 100% Limited and beverage (100% held by SSP) Phnom Penh International Airport, National Road No. 4, Sangkat Kakap, Khan Dangkor, Phnom Penh, Kingdom of Cambodia Minor Corporation Public Distribution 489,770,722 447,411,869 91.35% Company Limited (“MINOR”) 99 Berli Jucker House, 16th, 18th Floor, Soi Rubia, Sukhumvit 42, Prakanong, Klongtoey, Bangkok 10110 Tel. +66 (0) 2381 5123-32 Fax +66 (0) 2381 5118-9 • Armin Systems Limited Distribution - 1,100,000 1,099,997 100% 99 Berli Jucker House, 14th, 16th, Zwilling products, (100% held by MINOR) th th 17 , 18 Floor, Soi Rubia, “Zwilling J.A. Henckels”, Sukhumvit 42, Prakanong, Fashion apparel Klongtoey, Bangkok 10110 “Gap”, “Bossini” Tel. +66 (0) 2381 5780-5 and ladies footwear Fax +66 (0) 2381 4369 and handbags “Charles & Keith” • NMT Limited Manufacturing 100,000 99,998 100% 60/158 Moo 19 services of (100% held by MINOR) Phaholyothin Road, Khlong 1, Household Khlongluang, Prathumthani products such as Tel. +66 (0) 2520 3637-42 cleaning products, Fax +66 (0) 2520 3643 air freshener, Fabric Softener • Minor Development Limited Property 40,000 39,993 100% 99 Berli Jucker House, development (100% held by MINOR) 16th, 18th Floor, Soi Rubia, Sukhumvit 42, Prakanong, Klongtoey, Bangkok 10110 Tel. +66 (0) 2381 5151 Fax +66 (0) 2381 5777-8 • Select


Minor International Public company limited

227

Number of Ordinary Shares Core Business Outstanding Held Equity

Interest

Consultants & Services Limited Distribution 700,000 369,599 100% th th 99 Berli Jucker House, 12 , 16 , Aromatheraphy (% included held by 17th, 18th Floor, Soi Rubia, Products “Bloom”, Red Earth Thai Limited Sukhumvit 42, Prakanong, Cosmetics 330,400 shares) Klongtoey, Bangkok 10110 “Smash Box” Tel. +66 (0) 2712 2345 Luggage, soft brief Fax +66 (0) 2712 2346 and accessories “Tumi” • Red Earth Thai Limited Distribution 350,000 349,997 100% 99 Berli Jucker House, 12th, 16th, Color Cosmetics (100% held by MINOR) 17th, 18th Floor, Soi Rubia, “Red Earth” Sukhumvit 42, Prakanong, Klongtoey, Bangkok 10110 Tel. +66 (0) 2712 2345 Fax +66 (0) 2712 2346 • Esmido Fashions Limited Distribution 13,000,000 11,799,995 90.8% 99 Berli Jucker House, Fashion apparel (90.8% held by MINOR) th th th 16 , 17 , 18 Floor, Soi Rubia, “Esprit” Sukhumvit 42, Prakanong, Klongtoey, Bangkok 10110 Tel. +66 (0) 2712 2345 Fax +66 (0) 2712 2346 • Marvelous Wealth Limited Holding 1 1 100% East Asia Chambers, investment (100% held by MINOR) P.O. Box 901, Road Town, Tortola, British Virgin Islands • Thaisale.co.th Limited Online 300,000 150,298 50.1% 99 Berli Jucker House, 16th Floor, Shopping Club (50.1% held by MINOR) Soi Rubia, Sukhumvit 42, Prakanong, Klongtoey, Bangkok 10110 Tel. +66 (0) 2712 2345 Fax +66 (0) 2712 2346 • Minor


228

2011 Annual Report

Corporate Information Principal Activities

Food and Beverages, Retail Trading, Hotelier

and Retail Property Owner, Developer, Operator and Investments in related fields. Registered Office

Company Register Number: 0107536000919

(Previous number: Bor Mor Jor 165) 99 Berli Jucker Building, 16th Floor, Soi Rubia, Sukhumvit 42 Road, Prakanong Sub District, Klongtoey District, Bangkok 10110 Tel. +66 (0) 2381 5151 Fax +66 (0) 2381 5777-8 Home Page http://www.minornet.com

Share Capital as of 31 December 2011

Registered:

Baht 3,666,519,673 divided to 3,666,519,673 ordinary shares at par value of Baht 1 each Issued and fully paid: Baht 3,275,224,580 divided to 3,275,224,580 ordinary shares of Baht 1 each Solicitors

Dulayapab Law Office 25th Floor, The Trendy Office Building, 10/186 Sukhumvit Soi 13, Sukhumvit Road, Klong Toey Nua, Wattana, Bangkok 10110 Tel. +66 (0) 2168 7688-92 Fax +66 (0) 2168 7693

Siam Premier International Law Office Limited 26th Floor, The Offices at Central World Bldg., 999/9 Rama I Road, Pathumwan, Pathumwan, Bangkok 10330 Tel. +66 (0) 2646 1888 Fax +66 (0) 2646 1919

Baker & McKenzie Ltd. 25th Floor, Abdulrahim Place, 990 Rama IV Road, Bangkok 10500 Tel. +66 (0) 2636 2000 Fax +66 (0) 2636 2111

Company Registrar

Share Capital

Debenture

Thailand Securities Depository Co., Ltd. The Stock Exchange of Thailand Building, 62 Rachadapisek Road, Klongtoey, Bangkok 10110 Tel. +66 (0) 2229 2800 Fax +66 (0) 2359 1259

MINT No. 1/2007 tranche 1 and 2 and MINT No. 1/2008 Thai Military Bank Public Company Limited 3000 Phaholyothin Road, Ladyao, Chatuchak, Bangkok 10900

MINT No. 1/2009, No. 1/2010, No. 2/2010 tranche 1 and 2, No. 1/2011 Kasikorn Bank PCL, Securities Services Department Head Office Phaholyothin, 11th Floor, 400/22 Phaholyothin Road, Samsaennai, Phayathai, Bangkok 10400

MINT No. 2/2011 tranche 1 and 2 Bank of Ayudhya PCL. 1222 Rama III Road, Bang Phongphang, Yannawa, Bangkok 10120

PricewaterhouseCoopers ABAS Limited By Mrs. Anothai Leekitwattana and/or Mrs. Nattaporn Phan-Udom and/or Mr. Sudwin Panyawongkhanti and/or Mr. Prasit Yuengsrikul Certified Public Accountant (Thailand) No. 3442, 3430, 3534 and 4174 respectively 15th Floor, Bangkok City Tower, 179/74-80 South Sathorn Road, Bangkok 10120 Tel. +66 (0) 2286 9999 Fax +66 (0) 2286 5050

Auditors


To be a leading international hospitality and lifestyle operator by delivering branded products and services that provide 100% SATISFACTION to all stakeholders.

Minor International Public Company Limited 99 Berli Jucker House, 16th Floor, Soi Rubia, Sukhumvit 42 Rd., Bangkok 10110, Thailand Tel. : +66 (0) 2365 6117 Fax : +66 (0) 2365 6092 www.minornet.com


Annual Report 2011 EN